Assurant To Buy Warranty Group For $2.5 Bln Enterprise Value - Quick Facts

(RTTNews) - Assurant, Inc. (AIZ), a provider of risk management solutions, announced Wednesday its agreement to acquire Warranty Group, a provider of protection plans and related programs,and a portfolio company of TPG Capital. The transaction values Warranty Group at $1.9 billion in equity value, or $2.5 billion of enterprise value, including their existing debt.

The transaction is expected to be modestly accretive to Assurant's 2018 operating earnings per share on a run-rate basis. By the end of 2019, Assurant expects to generate $60 million of pre-tax operating synergies by optimizing global operations.

Under the definitive agreement, the companies will combine operations, with Assurant shareholders retaining majority ownership of the combined company.

Assurant, Inc. will become a wholly owned subsidiary of TWG Holdings Limited, whose name will be changed to Assurant Ltd.

Assurant shareholders will own approximately 77 percent of the combined entity as existing Assurant, Inc. shares are converted into shares of Assurant Ltd. on a one-for-one basis. TPG and its affiliates will own the remaining 23 percent, equal in value to 16 million Assurant shares, or approximately $1.5 billion at yesterday's closing price. Assurant will also pay approximately $372 million in cash to TPG.

Upon closing, Assurant Ltd. shares will trade on the New York Stock Exchange under the ticker symbol AIZ. The senior management team of Assurant will lead the combined organization.

Upon close, Assurant Ltd.'s board will be composed of 15 directors, including Assurant's 12 current directors and Nelson Chai, The Warranty Group's President and Chief Executive Officer, Eric Leathers, Partner at TPG Capital and Peter McGoohan, Principal at TPG Capital.

The deal is expected to close in the first half of 2018, subject to shareholder and regulatory approvals, and other customary closing conditions.

Assurant expects the transaction will significantly advance its strategy in the global lifestyle market with an attractive product and client portfolio, diversified growth profile and a deeper global footprint.

With annualized revenue greater than $1 billion as of June 30, 2017, Warranty Group is expected to enhance Assurant's scale and market presence in its vehicle protection, extended service contracts and financial services businesses across 35 countries.