AmTrust Financial Services through its subsidiary AMT Warranty has acquired the remaining 73% ownership interest in Warrantech, bringing its total ownership interest to 100%.
Headquartered in Bedford, Texas, Warrantech is developer, marketer, and third party administrator of service contracts and aftermarket warranty products that serves consumer products and automotive industries in the US and Canada.
AmTrust said that the transaction was funded with a net $7.5m in cash and includes an earnout payment to the sellers of a minimum of $2m with a maximum of $3m based on AMT Warranty EBITDA.
In addition, immediately following the transaction, the company’s existing $24.1m note receivable from Warrantech was transferred to AMT Warranty.
AmTrust Financial Services president and CEO Barry Zyskind said that by bringing together the two warranty administration platforms, the company expects to increase its fee income and benefit from enhanced scale and technology efficiencies while further enhancing its market presence and premium opportunities in warranty space.