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Prudential Financial Acquires Assurance For $3.5B

Sept. 6, 2019

Prudential Financial has acquired three-year-old Assurance for a total consideration of $3.5 billion, according to a release by FT Partners, who served as a strategic advisor on the deal.

The terms of the acquisition include upfront compensation of $2.35 billion and an additional earnout of $1.15 billion in cash and equity, depending on whether Assurance meets some growth objectives.

Started in 2016 by CEO Mike Rowell and Mike Paulus, Assurance is a direct-to-consumer (DTC) company that sells personalized health and financial wellness solutions.

The company uses a mixture of data science and human knowledge to match buyers with customized life, health, Medicare or car insurance, and allows them to either purchase it completely online or through an agent using technology. The Assurance model is designed to match customers with the best sales process, whether it is a live agent or otherwise.

FT Partners said the Assurance acquisition is the largest-ever InsurTech strategic effort, including SquareTrade’s $1.4 billion Allstate sale. It is also reportedly one of the biggest acquisitions of a company is not backed by venture capital.

“Assurance will add a large and rapidly growing direct-to-consumer channel to Prudential’s financial wellness businesses, significantly expanding the total addressable market of both companies,” FT Partners wrote.

Rowell said he is excited at the prospect of the acquisition. “Assurance was founded to protect and improve the personal and financial health of every individual,” he said. “Prudential’s shared vision, coupled with the strength of its offering and capabilities, make it the ideal partner with which to begin our next chapter. We are excited to create an ecosystem that reaches more people and new markets with a more expansive suite of products to drive our combined growth.”

Prudential Chairman and CEO Charles Lowrey shared similar sentiments about the deal: “Assurance accelerates the strategy and growth potential of Prudential’s financial wellness businesses.”

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FT Partners served as exclusive strategic and financial advisor to Assurance — view more details on the transaction here.

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