Prudential Financial to Buy Assurance IQ for $2.35 Billion -- Update
05 September 2019 - 9:48PM
Dow Jones News
By Colin Kellaher
Prudential Financial Inc. (PRU) on Thursday said it agreed to
buy Assurance IQ Inc., a direct-to-consumer platform for health-
and financial-wellness solutions, for an initial $2.35 billion.
Newark, N.J.-based Prudential said the deal includes an
additional earnout of up to $1.15 billion payable in 2023,
contingent on multi-year growth objectives.
The financial-services company said Assurance IQ matches buyers
with customized solutions for life, health, Medicare and auto
insurance, and its platform allows customers to buy entirely online
or with the help of a live agent.
Prudential said the Assurance deal adds a rapidly growing
direct-to-consumer channel to its financial-wellness businesses,
adding that it plans to offer its own solutions on the Assurance
platform alongside those of third-party providers.
Prudential said it will use a combination of cash on hand, debt
financing and equity to fund the acquisition, which it expects to
complete early in the fourth quarter.
The company said it will pay $1.88 billion in cash and $470
million in restricted common stock and equity awards at closing,
and said the earnout is payable in a mix of cash and stock.
Prudential said it expects the acquisition will add modestly to
per-share earnings starting next year, and that it expects to
generate costs saving of $50 million to $100 million.
The company said its board authorized a $500 million increase to
its stock buyback program for 2019, bringing the full-year
authorization to $2.5 billion. Prudential, which had repurchased $1
billion of stock through the end of June, and it expects to fully
use the increased authorization by the end of the year.
The company has about 406 million shares outstanding and a
market capitalization of roughly $32 billion based on Wednesday's
closing price of $79.65.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
September 05, 2019 07:33 ET (11:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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