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Risk management solutions provider Assurant has acquired The Warranty Group in a deal worth around US$2.5 billion, it was announced today.
The deal sees Assurant take The Warranty Group – which provides underwriting, claims administration and marketing expertise – from its current owner TPG Capital. It includes approximately 10.4 million Assurant shares, or US$993 million based on the acquisition agreement closing price, and approximately US$1.5 billion in cash after considering the repayment of The Warranty Group’s US$596 million in existing debt, the firm said in a statement.
Assurant said the transaction “further cements” its leadership position in vehicle protection, and supports the company’s growth strategy in the broader global lifestyle market with an attractive product and client portfolio and a deepened global footprint.
As part of the deal, Peter McGoohan and Eric Leathers, both representatives of TPG Capital, will join Assurant, Inc.’s board of directors and will serve on the board’s Compensation and Finance & Risk committees, respectively.
Assurant has also revealed a new leadership team for its global operations following the move.
UK-based Andy Morris will continue to serve as president of Assurant Europe, with Rich Green reporting directly to him as president of automotive, Europe for Assurant. Felipe Sanchez has been appointed country president for Assurant Mexico, a role he held at The Warranty Group; Manfred Schmoelz will serve as president of Assurant Asia-Pacific, after holding a similar position at The Warranty Group; Gary Mann becomes strategy and operations leader, international; Junichi Fujimoto will continue as board director, Assurant Japan; Robert Zanussi remains in his role as country president of Assurant Canada, and Federico Bunge will continue in his position as president of Assurant Latin America.
“We are excited to close our acquisition of The Warranty Group, which significantly advances our global lifestyle growth strategy of helping consumers protect their appliances, mobile devices and electronics, while solidifying our global position as the premier provider of vehicle protection services,” commented Assurant president and chief executive officer, Alan Colberg.
“The combination of our two companies will support ongoing product and service innovation for our clients and consumers, while we expect to realize significant operating synergies and generate more diversified and predictable earnings over time.”
Jointly operating across 21 countries, the acquisition of The Warranty Group will provide additional resources for Assurant’s mobile strategy in key markets such as Asia-Pacific. The group’s US vehicle protection business brings new client partnerships and distribution channels, including dealer networks and national accounts to Assurant, the firm said.
With annual revenue exceeding US$2 billion, as of March 31, 2018, The Warranty Group expands Assurant’s size and scale within vehicle protection, extended service contracts and financial services. By the end of 2019, Assurant expects to generate US$60 million of pre-tax operating synergies by optimizing global operations, it said.
Speaking of the new appointments, Keith Meier, president of international at Assurant, said talent plays a “critical role” in the firm’s global success.
"This combination translates to a deeper bench of talent with an enhanced ability to deliver unique solutions for our clients and customers,” he said.
“Each of these leaders, individually and collectively, will leverage our deep expertise and flexible capabilities to deliver unique insights and product innovation for our clients and customers in their respective markets across the world.”
