Onex Corp to sell The Warranty Group to TPG Capital for $1.5 bn
22 Mar 2014
Canadian private equity firm Onex Corp yesterday agreed to sell The Warranty Group (TWG), a provider of extended warranty contracts, to an affiliate of TPG Capital Management, for an enterprise value of about $1.5 billion.
The Toronto-based PE firm said that post closing it will have received proceeds of around $1.5 billion, including prior distributions of $403 million. Onex's portion of the proceeds would be approximately $385 million, including carried interest.
The Toronto-based firm had in September 2013 hired Goldman Sachs, Morgan Stanley and Citigroup to find a buyer for the business.
Onex had teamed up with the management of TWG to buy the Chicago-based company in 2006 from insurance broker Aon Corp for $710 million.
''This is a very good outcome for Onex' shareholders and our limited partners,'' said Bobby Le Blanc, a senior managing director of Onex. ''TWG's performance is a testament to our approach of identifying attractive carve-out opportunities and partnering with management teams to build industry-leading businesses and improve operational efficiency on a standalone basis.''
TWG is one of the world's largest underwriters and administrators of extended warranties on a wide variety of consumer goods, including automobiles, consumer electronics, medical devices, fitness equipment, power tools, appliances and home systems.
The 50-year old group also provides credit insurance and other specialty insurance products.
It has over 1,900 employees, operates in 32 countries and annual sales of $1.2 billion.
The transaction is expected to close during the third quarter of 2014, subject to customary closing conditions including regulatory approval.