In 1983 a grocery distributor raised $9.6 million in an initial public offering that valued the Dublin business just shy of $35 million.
Today Cardinal Health Inc. is Ohio's largest publicly traded company, with $153 billion in annual revenue and a market capitalization of $14 billion. The IPO of the former Cardinal Distribution paid for a series of 1980s acquisitions in its steady march to becoming a healthcare giant, after shedding the groceries.
It's a classic Ohio stock – age-old industries like banking, fashion, tires, jelly, steel.
Root Inc., the parent of Columbus-based Root Insurance Co., registered this week to bring a new species to the state: a high-flying venture-backed tech IPO.
"There has never been venture-backed company from Ohio that has gone public at more than $1 billion (value)," said Steve Salopek, senior lecturer in finance at Ohio State University and a former investment manager.
If Root debuts at the $6 billion valuation reported by Reuters – not independently confirmed by the company or its filings – it would be the highest-valued market debut in Ohio, according to data from Crunchbase and a Columbus Business First search of U.S. Securities and Exchange Commission filings.
SEC filings were not readily available before 1995. Cardinal provided a copy of its 1983 prospectus at the request of Business First.
Ohio's first tech unicorn, valued at greater than $1 billion, was Columbus' CoverMyMeds when McKesson acquired it three years ago. The state hasn't seen a huge tech IPO yet because the state's efforts to attract venture capital started just over a decade ago, Salopek said.
“These companies in terms of venture, they are relatively young,” Salopek said. “You’re just not far enough into the investment cycle for us to be seeing billion-dollar IPOs at this point.
“Easily within the next five years, you’re going to see a number of them, as Ohio matures.”
Sure, Root sells auto and rental insurance, but the prospectus' emphasis on machine learning algorithms makes clear that's not what it's selling to the market.
“Root is going to have to position themselves as a technology company as opposed to an insurance company,” Salopek said. “The value of an insurance company in liquidation is the value of the securities it holds.”
