Assurant seals $2.5bn merger deal with Warranty Group

Specialty insurance provider Assurant and warranty solutions provider The Warranty Group, a portfolio company of TPG Capital, have entered into a definitive agreement to merge operations.

Assurant shareholders will retain the majority ownership of the combined company, according to an Oct. 18 statement. The transaction is valued at approximately $2.5 billion and is expected to close in the first half of 2018, subject to shareholder and regulatory approvals.

With this acquisition, Assurant looks to diversify its growth profile and deepens its footprint and product offerings in key international markets. The deal will also significantly advance Assurant’s strategy in the global lifestyle market. The Warranty Group reported annualized revenue greater than $1 billion as of June 30, 2017.

"Assurant’s acquisition of The Warranty Group advances our position as a leading global provider in the vehicle protection business and aligns well with our lifestyle market growth strategy helping consumers protect their appliances, autos, mobile devices, and electronics," said Assurant CEO Alan Colberg.

"Together, we believe we can deepen our global footprint and accelerate profitable growth in key markets already on Assurant’s strategic roadmap, while realizing substantial operating synergies, generating more diversified and predictable earnings and furthering product innovation on a global scale."

Nelson Chai, The Warranty group’s CEO, said: "This transaction brings together two businesses with highly aligned expertise in markets across the world. We believe this combination enhances our ability to offer best-in-class products and services in addition to providing new opportunities to our clients, partners, employees and other key stakeholders."

Eric Leathers, partner at TPG Capital, commented: "This strategic partnership is an outstanding outcome for both Assurant and The Warranty Group, positioning the combined company for continued success. Since acquiring The Warranty Group, we have supported the company’s management team as they have expanded their global service contract business by pursuing attractive pathways for growth. This combination builds on these initiatives, and we at TPG are excited by the future value creation that will stem from this."

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