Assurant, Warranty Group Amend Deal Structure - Quick Facts

(RTTNews) - Assurant Inc. (AIZ), a provider of risk management solutions, and Warranty Group, a provider of protection plans and related programs, as well as a portfolio company of TPG Capital, said they have amended the structure of their $2.5 billion transaction, previously announced on October 18, 2017.

Under the revised terms, Assurant will acquire TWG Holdings Limited and its subsidiaries, and remain a Delaware corporation. This change follows recently enacted U.S. tax legislation and allows Assurant to simplify the overall deal structure as well as optimize the transaction financing mix.

The transaction, which is expected to close in the second quarter of 2018, remains valued at $1.9 billion in equity value or $2.5 billion of enterprise value, including Warranty Group's existing debt.

Assurant noted that as before, the acquisition is expected to be modestly accretive to its 2018 operating earnings per share on a run-rate basis, and significantly more accretive excluding the amortization of transaction-related intangible assets.

The accretion is now measured against a higher expected Assurant stand-alone earnings per share baseline, which reflects the net benefits from enacted U.S. tax legislation. Assurant will continue to be traded on the New York Stock Exchange under the ticker symbol "AIZ".

Changes from the new transaction structure include that TPG Capital and its affiliates will receive 10.4 million Assurant shares, or approximately 19.8 percent of the current shares outstanding. This represents a reduction from the 16.0 million shares to have been issued previously.

In exchange for fewer Assurant shares, TPG Capital and its affiliates will receive increased cash consideration, totaling approximately $860 million. Assurant said it has entered into a new commitment letter for a $1.5 billion bridge facility, increased from $1.0 billion, to reflect the new structure.

The transaction will no longer be taxable to Assurant's shareholders in the U.S. or other jurisdictions. Upon closing, Assurant's board will be comprised of 14 directors, including two from TPG Capital.