Investment firm opposes Fortegra sale to South Korean company

An investment firm is opposing the sale of The Fortegra Group Inc., saying the deal is unfair to shareholders of Tiptree Inc., the majority owner of Jacksonville-based Fortegra.

Veradace Partners L.P. said in a Nov. 10 letter to Tiptree shareholders that it owns 5% of Tiptree's stock, and that it bought shares beginning in 2019 because of the company's ownership of specialty insurance company Fortegra.

South Korea-based DB Insurance Co. Ltd. agreed in September to buy Jacksonville-based Fortegra for $1.65 billion.

Tiptree acquired Fortegra in 2014 and continues to own 78.9% of the company.

Tiptree's stake in Fortegra is the company's largest asset. Veradace said in its letter that the investment in Fortegra represents more than 90% of Tiptree's total value.

"While we are disappointed that Tiptree's Board of Directors has chosen to sell Fortegra to DB Insurance at an inadequate valuation, we find it more troubling that the Proposed Transaction's structure is dramatically out of line with Tiptree shareholders' best interests," the letter said.

Tiptree's stock dropped after announcing the sale agreement and Veradace said it was down 23% since the announcement at the time of its letter.

"While we are not philosophically opposed to a sale of Fortegra, the terms of the Proposed Transaction must be revised. At a minimum, should DB Insurance wish to purchase Fortegra, we suggest they do so through an acquisition of Tiptree that will deliver value directly to all Tiptree shareholders," it said.

Tiptree has not publicly responded to Veradace's letter.

Tiptree has said it will seek new investment opportunities after the Fortegra sale but has not offered any specifics.

Veradace faces an uphill battle to gain shareholder support to vote against the deal. Tiptree said in the proxy statement that it has agreements from shareholders holding 37% of the stock to vote in favor, including Executive Chairman Michael Barnes, the largest shareholder with 27% of the stock.

Veradace is not listed as a 5% shareholder in the proxy but the investment firm said in its letter it is the second-largest non-affiliated shareholder.

Dimensional Fund Advisors is listed in the proxy with 5.76% of the stock.

The virtual special meeting to vote on the deal is scheduled for Dec. 3.

Cannae shifts focus to private companies, sports

Cannae Holdings Inc., the investment firm spun off from Jacksonville-based Fidelity National Financial Inc., is shifting its focus away from publicly traded companies after selling its stake in Dun & Bradstreet Holdings Inc. in August.

It is also shifting its focus to investments in sports.

Cannae owned 13.5% of Jacksonville-based Dun & Bradstreet and received $630 million in proceeds when Clearlake Capital Group L.P. completed its acquisition of the business data firm Aug. 26.

Cannae CEO Ryan Caswell said in the firm's quarterly conference call Nov. 10 that after that deal and other stock sales, Cannae's investment portfolio has dropped from 70% in public investments to 20%.

"We believe this change is important for our shareholders as our portfolio now consists primarily of proprietary private investments that we believe will generate outsized returns and which our shareholders wouldn't otherwise be able to access but through Cannae," he said.

"In terms of future capital allocation, the Board has directed management to continue concentrating our efforts in sports and sports-related assets where we have demonstrated a proven and durable competitive advantage."

Cannae's portfolio includes the Black Knight Football Club, which has a majority stake in British Premier League team AFC Bournemouth and other European soccer teams.

"We note, from our past client conversations, Cannae's BKFC has been seen as one of the brighter prospects within the portfolio," RBC Capital Markets analyst Kenneth Lee said in a research note after Cannae's report.

Cannae Vice Chairman Bill Foley is also majority owner of the NHL's Vegas Golden Knights hockey team.

The company has historically focused on investments in restaurants, which accounted for $94.6 million of its $106.9 million in operating revenue in the third quarter.

Cannae has scheduled its annual shareholders meeting for Dec. 12 where it faces a proxy fight from activist investment firm Carronade Capital Management LP.

Carronade, which has expressed opposition to Cannae's strategy, has nominated its own slate of four directors to replace four Cannae nominees on the 12-member board of directors.

Paysafe falls to new low after reducing forecast

Cannae continues to hold about 4% of the stock in payments processing company Paysafe Ltd., which fell to new lows after lowering its earnings forecast Nov. 13.

London-based Paysafe, which has its North American headquarters in Jacksonville, reported third-quarter revenue rose 2% to $433.8 million and adjusted earnings rose 28% to $40.3 million, or 70 cents per share.

However, it lowered its earnings forecast for all of 2025 to $1.83 to $1.88 per share, from its previous projection of $2.21 to $2.51.

"Our updated 2025 outlook reflects our current business dynamics and a longer timeline for the delivery of key product initiatives as we navigate the complex ecosystem required to bring innovative new solutions to the market," CEO Bruce Lowthers said in a conference call.

"While we're not seeing the EBITDA expansion that we initially planned for the year, we remain focused on driving stronger operating leverage and expect to deliver higher adjusted EBITDA growth in 2026 and beyond," he said.

Paysafe's stock fell as much as $3.50 over two days to $6.66 on Nov. 14 after the earnings report.

Analyst rates Fidelity at 'overweight'

Stephens analyst Oscar Nieves began coverage of title insurer Fidelity National Financial on Nov. 13 with an "overweight" rating on the stock.

"FNF offers a straightforward story: a market leader with proven execution, strong cash flow, and a valuation that leaves room for upside," Nieves said in a research note.

"As housing volumes recover and rates stabilize, we see a clear path to higher earnings and a re-rating closer to historical levels," he said.

Nieves set a price target of $68 with the stock trading at $58.50 at the time of his report.

Analyst thinks drop in Dream Finders' stock overdone

Dream Finders Homes Inc. has taken shareholders on a roller coaster ride for the last couple of years, but Zelman & Associates analyst Alan Ratner thinks the ride should be heading up soon.

"In 2023, DFH was the top performing homebuilding stock in our coverage universe, surging more than 300% for the year as the company was one of only three builders to post EPS growth in a challenging market," Ratner said in a Nov. 12 research note.

"However, DFH was the weakest performer in 2024 (down 47% versus a 1% decline for the group) and it is the second-weakest stock year to date (down 19% versus a 3% gain for the group)," he said.

But Ratner thinks the stock's underperformance is overdone and he upgraded his rating from "neutral" to "outperform." He said the fair target value is $22.50, with the stock trading at $18.88 at the time of his note.

Proficient Auto Logistics results up on acquisitions

Proficient Auto Logistics Inc. reported higher third-quarter revenue and earnings, helped by acquisitions, as the company assesses the auto sales market.

Jacksonville-based Proficient, which transports cars from manufacturers to dealers, said revenue rose 25% to $114.3 million with adjusted operating income nearly quadrupling to $4.2 million.

"From a market perspective, volatility in automotive manufacturing and purchase levels continues reflecting production disruption due to supply chain issues and economic impacts of the expiring EV tax credit, interest rate adjustments and tariffs," CEO Rick O'Dell said in a Nov. 11 conference call, according to a company transcript.

"With dealer inventory levels healthy, along with a favorable tax policy for qualifying car loan interest deductions, a high likelihood of continued interest rate reductions and average vehicle age above historical norms for replacement and a typical seasonal increase in buying at the end of the year, we're hopeful that volumes strengthen through the balance of the fourth quarter, but we expect a modestly lower revenue outcome than the third quarter," he said.

Duos Technologies' revenue jumps on power business

Duos Technologies Group Inc. reported third-quarter revenue more than doubled to $6.9 million, with most of the revenue coming from its new subsidiary that deploys power systems.

Jacksonville-based Duos had mainly been a developer of railroad technology but last year added the power system business and another new subsidiary that provides artificial intelligence data centers in rural markets.

"Our team has been working super hard to pivot the business into the data center and power space and now it's really beginning to pay off," CEO Chuck Ferry said in a Nov. 12 conference call, according to a company transcript.

Norlee buys Tampa electrical construction firm

Jacksonville-based Norlee Group acquired Inter-Bay Electric Co., a Tampa electrical construction firm, according to a Nov. 12 announcement by Norlee investor Heartwood Partners.

Norlee provides integrated solutions in electrical, mechanical, low-voltage, design/build engineering and underground infrastructure in the Southeastern U.S.

Private equity firm Heartwood announced in June it invested in Norlee.

Terms of the deal were not announced.

Nivel Parts buys lithium battery firm

Jacksonville-based Nivel Parts & Manufacturing announced Nov. 12 it acquired Bolt Energy USA, a Largo-based manufacturer of lithium battery technology used in personal transportation vehicles.

Nivel, founded in 1968, is a manufacturer and distributor of aftermarket parts for specialty vehicles.

Terms of the deal were not announced.