Conning Flows $17M into Clark/Bardes PIPE

Publicly traded Clark/Bardes Holdings Inc. agreed to a private placement of 1 million shares of common stock May 11 with Conning & Co. of Hartford.

The transaction, which is expected to close by the end of June, calls for Conning to pay $17 per share, after which the firm will own 10.5% of 9.5 million outstanding shares in Clark/Bardes.

Dallas-based Clark/Bardes designs and assists in financing non-qualified executive defined contribution and other compensation/benefit plans. Since its initial public offering last August, the company has been on an acquisition spree, increasing its run rate of revenue to $150 million.

“I believe they will be in a financing mode for some time to come,” said Conning Partner Steve Piaker, who will join Clark/Bardes’ board following the deal’s close.

Clark/Bardes Chairman Tom Wamberg said the company chose to access the private market for this financing due to the modest capital need, as well as to the fact that he anticipates a large secondary offering this summer.

Proceeds from the financing will subsidize new acquisitions prior to the secondary offering and pay down some debt on the company’s $65 million line of credit. The company has been paying 5-6X cash flow for its targets, pre-tax, a number that Wamberg said is reduced after taxes because of the renewal commissions that come through acquisitions.

Wamberg said the company is the only publicly traded player in its industry, and he said the firm is focusing on three areas of strong growth – corporate lines, banking and health care.

“Because of our run-rate of revenue, many feel it is better to team up with us rather than keep fighting,” Wamberg said.