Earlier this week, the Allstate Corporation (NYSE: ALL) announced it is set to acquire SquareTrade, a fintech company that provides consumer protection plans and distributes through major retailers, including Amazon, Costco, Sam’s Club, Target, Staples, Office Depot and Toys “R” Us.
According to SquareTrade, acquiring the company will help expand Allstate’s customer relationships with 25 million protection plans for consumer electronics and connected devices. Tom Wilson, chairman and CEO of Allstate, stated that Allstate’s consumer-focused strategy of providing unique products would also be further enhanced thanks to the acquisition.
Ahmed Khaishgi, CEO and co-founder of SquareTrade, explained:
“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. 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.”
SquareTrade will be purchased for approximately $1.4 billion from a group of shareholders, Bain Capital Private Equity and Bain Capital Ventures. The transaction is expected to close in January 2017. Phil Loughlin, managing director of Bain Capital, added:
“Allstate acquiring SquareTrade is exactly the right next step for the company. 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.”