iA Financial Group Concludes the Acquisition of US-based Vehicle Warranty Business
iA Financial Corporation Inc. (TSX: IAG), the holding company of iA Financial Group, announces that it has concluded the acquisition of the American company IAS Parent Holdings, Inc. and its subsidiaries (collectively “IAS”). The agreement to acquire IAS was announced December 4, 2019.
Based in Austin, Texas, IAS is one of the largest independent providers of solutions in the U.S. vehicle warranty market with 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.
“We are pleased to announce the completion of the acquisition of IAS and to welcome its high-quality management team within iA Financial Group,” said Denis Ricard, President and Chief Executive Officer of iA Financial Group. “By combining the complementary strengths of IAS and of our existing warranty business in the U.S., we will be well positioned for the growth opportunities that may arise in this highly fragmented market.”
“I am proud of our entire team and their hard work and growth over the last few years,” added Patrick Brown, President and Chief Executive Officer of IAS. “With the strength and resources of iA, we look forward to continuing to grow and providing the best products and services in the industry to our long-standing partners and customers. We’re excited for the opportunities that lie ahead as a part of the iA family and can’t wait to get to work.”
The purchase price of US$720 million, for which a currency hedge was put in place, has been funded by iA Financial Group’s excess capital. Following closing of the acquisition and of iA Investment Counsel’s sale which is expected to close during the second quarter of 2020, iA Financial Group will maintain a sound capital position with a pro forma solvency ratio as at March 31, 2020 of 121%, above its target range of 110 to 116%.