iA Financial acquires IAS for $720M

iA Financial Group announced it has entered an agreement to acquire IAS Parent Holdings, Inc. and its subsidiaries for $720 million.

Based in Austin, Texas, IAS is one of the largest independent providers of solutions in the U.S. vehicle warranty market with more than 600 employees and over 35 years of history. IAS provides a comprehensive portfolio of vehicle warranties and related software and services sold through one of the industry’s broadest and most diverse distribution networks consisting of over 4,300 dealers in all fifty states.

This acquisition is complementary to the Company’s existing warranty operations in the US.

“This transaction leverages the expertise and experience in dealer services that iA Financial Group has built over the last 20+ years in Canada and more recently in the U.S. through the acquisition of Dealers Assurance Company in 2018. The U.S. market for extended auto warranties, valued at almost US$39 billion, is highly-fragmented and provides significant opportunity for organic growth and consolidation. Our investment in IAS will enable us to be a best-in-class provider of vehicle warranty products and services.” – Denis Ricard, President and Chief Executive Officer of iA Financial Group.

The acquisition will be funded by iA Financial Group’s excess capital. After transaction close, the pro forma solvency ratio of the Company as at September 30, 2019 is 117%. The Company expects the contribution from this acquisition to be neutral to earnings per share in the first year and accretive as of the second year. The transaction is expected to close in the first half of 2020, subject to obtaining the usual regulatory approvals in Canada and the United States, and other customary closing conditions.