trending Market Intelligence /marketintelligence/en/news-insights/trending/D9j2KxqLuuWnaCD5bdFytg2 content esgSubNav
In This List

Assurant to acquire Warranty Group from TPG Capital in $2.5B deal


Perspectives from China: The Shifting Regulatory Landscape


Anticipate the Unknown: Does Supply Chain Disruption Lead to Increased Credit Risk?


Data Stories: Data insights to help alleviate business complexity amid geopolitical risks


Street Talk | Episode 90: Banks should not wait on the Fed to put cash to work

Assurant to acquire Warranty Group from TPG Capital in $2.5B deal

Assurant Inc. has agreed to acquire Warranty Group Inc., a portfolio company of TPG Capital Management LP that provides protection plans and related programs, in a deal valued at approximately $2.5 billion.

The transaction will advance Assurant's strategy in the global lifestyle market, improve its scale and market presence in its vehicle protection, extended service contracts and financial services businesses across 35 countries. The resulting geographic footprint will also provide resources to accelerate Assurant's mobile strategy in key markets such as Asia-Pacific.

The deal values The Warranty Group at $1.9 billion in equity value, or $2.5 billion of enterprise value, including existing debt. Under the agreement, Assurant Inc. will become a wholly owned subsidiary of TWG Holdings Ltd., whose name will be changed to Assurant Ltd. Assurant shareholders will own approximately 77% 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%. Assurant will also pay approximately $372 million in cash to TPG.

When the deal closes, 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. 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 CEO; Eric Leathers, partner at TPG Capital; and Peter McGoohan, principal at TPG Capital.

Assurant intends to finance the cash consideration and repayment of approximately $591 million of The Warranty Group's existing debt through new debt, and preferred securities expected to be issued after closing. It has entered into a commitment letter for a $1.0 billion bridge facility with Morgan Stanley Senior Funding Inc.

The transaction is expected to be modestly accretive to Assurant's 2018 operating EPS on a run-rate basis. By the end of 2019, Assurant expects to generate $60 million of pretax operating synergies by optimizing global operations. The deal will be taxable to Assurant’s shareholders in the U.S. and certain other jurisdictions.

The deal is expected to close in the first half of 2018, subject to shareholder and regulatory approvals, and other closing conditions. Assurant would be required to pay a termination fee of $65 million if the deal falls through under certain circumstances.

Morgan Stanley & Co. LLC is serving as financial adviser to Assurant, with Willkie Farr & Gallagher LLP serving as legal adviser. UBS Investment Bank is serving as financial adviser to The Warranty Group, with Skadden Arps Slate Meagher & Flom LLP serving as legal adviser.