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Warranty Group Sold For $3.2 Billion

The Warranty Group a supplier of services to consumer electronics and appliances retailers along with automotive distributors has been sold for $3.2 Billion.

The Australian subsidiary that is Melbourne based has not commented on the sale of the group to Assurant.

Warranty Group, a portfolio company of TPG Capital, is a provider of protection plans, with annual revenue of over $1 billion, Australian revenues are not known.

When the deal is completed, which is expected in the first half of 2018, Assurant will become a wholly-owned subsidiary of TWG Holdings Ltd., whose name will be changed to Assurant Ltd., with current Assurant shareholders owning 77% of the combined entity and TPG owning the remaining 23%.

TPG’s stake will be equal to 16 million Assurant shares, or $1.5 billion at recent prices, and Assurant will also pay $72 million in cash to TPG. Assurant expects to fund the deal with new debt and the issuance of new preferred securities.

The deal is expected to add modestly to to 2018 operating earnings. “”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 Chief Executive Alan Colberg.