US property and casualty insurer Allstate to buy SquareTrade for $1.4 bn
29 November 2016
US property and casualty insurer Allstate Corp yesterday struck a deal to buy protection plan provider SquareTrade Holding Co Inc for about $1.4 billion from a group of investors including private equity firm Bain Capital.
San Francisco and London-based SquareTrade provides protection plans for mobile devices, laptops and tablets, and other consumer electronics and appliances from malfunctions, accidental damage and life's frequent mishaps.
It has tie-ups with major retailers, including Amazon, Costco, Sam's Club, Target, Staples, Office Depot and Toys ''R'' Us.
Allstate Corp is the largest publicly held personal lines insurer in the US, protecting approximately 16 million households through auto, home, life and other insurance offered through its Allstate, Esurance, Encompass and Answer Financial brand names.
''Allstate's consumer-focused strategy of providing unique products will be further enhanced with the acquisition of SquareTrade,'' said Tom Wilson, chairman and CEO of Allstate. ''This acquisition expands Allstate's customer relationships with 25 million protection plans for consumer electronics and connected devices.
''Khaishgi, co-founder and CEO of SquareTrade, said, ''We put customers first and provide them the peace of mind that if their television, cell phone or computer breaks, SquareTrade can get them back to normal so they can stay connected with the world. With Allstate, we will gain a broad set of capabilities enabling us to further leverage our distribution, brand and team, while retaining our entrepreneurial spirit.''
Allstate will acquire SquareTrade utilising corporate cash and debt issuance, subject to market conditions. The transaction is expected to be dilutive to Allstate's earnings per share for three years, including the amortization of intangible assets, and is subject to regulatory approvals and customary closing conditions.