Details of the acquisition
On September 16, Assurant Solutions, a part of Assurant (AIZ), announced an agreement to acquire a long-term partner, Canadian auto service contract company Coast to Coast Dealer Services. Coast to Coast has been Assurant’s long-time partner in its vehicle service business.
Assurant plans to utilize Coast to Coast’s capabilities and expert customer care team to provide customers with enhanced vehicle service contract offerings. This would help Assurant to acquire new customers and add to revenues. During the transition, the founder and president of Coast to Coast, Bill Wereha, will remain with the company to facilitate the integration.
Coast to Coast is a Canadian-based provider of service contracts for pre-owned and new vehicles. It has been associated with Assurant as a distribution partner for 12 years. Coast to Coast has been in the business of providing aftermarket specialty products and extended service contracts for the last 20 years. The company is headquartered in Hamilton, Ontario.
Coast to Coast has provided a full range of products, including mechanical breakdown protection plans, creditor insurance, keys, remotes, tires, rims, TheftGUARDIAN (glass and body etching), and RV coach coverage for motor homes.
Stock performance after the announcement
Following the announcement, share prices of Assurant fell by 1.14% on September 16. Comparatively, peers such as American International Group (AIG), Hartford Financial (HIG), and Genworth Financial (GNW) returned 0.44%, 0.61%, and 2.76%, respectively. On the same day, the broad-based S&P 500 SPDR ETF (SPY) gained 0.87%.
Investors looking for diversified exposure to financial services stocks can invest in the Financial Select Sector SPDR ETF (XLF).