Allstate acquires SquareTrade
NORTHBROOK, Illinois, November 28, 2016
The Allstate Corporation has agreed to acquire SquareTrade, a rapidly growing consumer protection plan provider that distributes through many of America’s major retailers. The privately held company will be purchased for approximately $1.4 billion from a group of shareholders, including Bain Capital Private Equity and Bain Capital Ventures, in a transaction expected to close in January 2017.
“Allstate’s consumer-focused strategy of providing unique products will be further enhanced with the acquisition of SquareTrade,” said Tom Wilson, chairman and chief executive officer of Allstate. “This acquisition expands Allstate’s customer relationships with 25 million protection plans for consumer electronics and connected devices. SquareTrade’s exceptional customer service, innovative product design, analytics and supply-chain logistics have led to a four-fold increase in revenue over the last five years and are consistent with Allstate’s history of product innovation. The SquareTrade team under Ahmed Khaishgi has built strong relationships with major retailers, including Amazon, Costco, Sam’s Club, Target, Staples, Office Depot and Toys “R” Us, and further expands our customer reach,” concluded Wilson.
“Joining Allstate will enable SquareTrade to expand into new markets and products that Steve Abernethy and I did not imagine possible when we founded the company in 1999,” said Khaishgi, co-founder and chief executive officer of SquareTrade. “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,” concluded Khaishgi.
“Allstate acquiring SquareTrade is exactly the right next step for the company,” added Phil Loughlin, managing director, Bain Capital. “It has been a privilege to help SquareTrade scale, innovate and disrupt a $20 billion industry, and we look forward to seeing its continued success.”
Allstate will acquire SquareTrade utilizing corporate cash and debt issuance, subject to market conditions, with no impact on Allstate’s existing share repurchase program. 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.