January 24, 2018 09:45
The acquisition of the american company of automobile warranties Dealers Insurance Company and Southwest Reinsure (collectively, DAC) by ai financial Group has concluded today. The transaction was announced last September and the price is $ 135 million us dollars (166 million canadian dollars).
DAC prepares and distributes contracts of service for vehicles within a network of dealers of new cars and used throughout the United States. «The u.s. market for extended warranties accounts for approximately $ 15 billion, or ten times more than that of Canada,» said Mike Stickney, president of iA American.
The transaction allows ai to double its business volume in the automobile warranties. Thus, the insurer, who had reported direct premiums written of$ 197 Million in 2016 in Canada, the increase to$ 500 Million, taking into account the contribution of DAC on a comparable basis.
iA specifies that the acquisition, funded with cash on hand, will reduce the solvency ratio of the company of approximately eight percentage points. The transaction is expected to be profitable as early as this year, » but in a modest way «, contributing to a growth in earnings of approximately $ 0.05 per share in 2019.