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Tiptree acquires vehicle warranty solutions provider, affiliates in $110.7M deal

Tiptree Inc. subsidiary Tiptree Warranty Holdings LLC on Jan. 3 acquired all outstanding equity interests of Smart AutoCare and affiliated entities.

The all-cash deal follows an equity interest purchase agreement reached Dec. 16, 2019, between Tiptree Warranty and Smart AutoCare CEO Peter Masi.

The acquired entities include Accelerated Service Enterprise LLC, SAC Holdings Inc., Dealer Motor Services Inc., Independent Dealer Group Inc., Ownershield Inc., Freedom Insurance Co. Ltd., SAC Admin Inc., SAC Insurance Co. Inc., Smart AutoCare Inc. and Smart AutoCare Administration Solutions Inc.

Tiptree Warranty paid Masi $110.7 million in cash, $8.25 million of which was deposited into an escrow account for 18 months. Masi will remain CEO of the acquired entities. Freedom Insurance also terminated reinsurance agreements with affiliates of Masi, requiring them to pay $102.2 million to the company.

The agreement also provides for an earnout of up to $50 million in cash and an additional earnout of up to $30 million in cash or Tiptree common stock, both of which are based on the performance of the businesses after closing.

Tiptree Warranty is an affiliate of Fortegra Financial Corp.