Transactions

Focused on the crossroads of insurance,
healthcare services, investment services,
and the technologies that serve those sectors.
Transaction Value: $720,000,000
IAS
a portfolio company of
announced its acquisition by
iA Financial
Financial advisor to IAS December 2019
iA Financial Group to Establish Leading Position in the U.S. Vehicle Warranty Market with the Acquisition of IAS
Industry: Insurance
Type: Sell-Side M&A
  • Accelerates iA’s growth strategy, capitalizing on positive growth trends within the vehicle warranty market
  • Creates a leading U.S. vehicle warranty platform of scale with significant synergies, which will drive iA’s participation in future industry consolidation
  • Diversifies iA’s product and geographic mix, as well as distribution capabilities
  • Adds a strong, proven management team, led by Patrick Brown, which will drive U.S. expansion efforts in vehicle warranties
  • Advances iA’s ongoing shift towards a capital-light business

iA Financial Corporation Inc. (the “Company”), the holding company of iA Financial Group, announced today that it has entered an agreement to acquire the American company IAS Parent Holdings, Inc. and its subsidiaries (collectively “IAS”). The agreed purchase price is US$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 highly complementary to the Company’s existing warranty operations in the U.S. with respect to product suite, distribution networks, and geographic scope. The synergies from the combined operations will create a true centre of excellence in dealer services that will provide a platform for future growth. “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,” said Denis Ricard, President and Chief Executive Officer of iA Financial Group. “We look forward to this new chapter in our U.S. expansion with great optimism, combining IAS with our already well-established presence in the United States and leveraging our strong track record in dealer services in Canada,” stated Mike Stickney, Chief Growth Officer of iA Financial Group and head of the Company’s U.S. operations since 2005. “This acquisition expands our customer offering by bringing an end-to-end product suite and omni-channel distribution, as well as reinforcing our national breadth. Along with the high-quality senior management of IAS who will be joining our organization, we will have the platform to pursue our growth strategy in the vehicle warranty market in the United States.” 

“The IAS team is excited to become part of the iA family. I am very proud of our team’s hard work and record growth the last few years,” noted Patrick Brown, President and Chief Executive Officer of IAS. “Going forward, as part of a publicly-traded company with a market capitalization of more than C$7.0 billion, we are well positioned to continue the long-term support of our valued distribution partners and to deliver on our mission of empowering vehicle owners to avoid unforeseen repair costs.” 

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.