iA Financial Corp., one of Canada’s largest insurance and wealth management companies, secured a larger amount of the dealer warranty business in the United States last week.

According to a news release, iA Financial, the holding company of iA Financial Group, announced today that it has entered an agreement to acquire the American company IAS Parent Holdings and its subsidiaries. The agreed purchase price is $720 million.

Based in Austin, Texas, IAS is one of the largest independent providers of solutions in the U.S. vehicle warranty market with more than 600 employees and more than 35 years of history. IAS provides a comprehensive portfolio of vehicle warranties and related software and services sold through one of the industry’s broadest and most diverse distribution networks consisting of over 4,300 dealers in all 50 states.

iA Financial highlighted this acquisition is highly complementary to the company’s existing warranty operations in the U.S. with respect to product suite, distribution networks and geographic scope. At the beginning of 2018, the company finalized its purchase of Dealers Assurance Company and Southwest Reinsure Inc., a company collectively known as DAC.

Denis Ricard, president and chief executive officer of iA Financial Group, explained the synergies from the combined operations will create a true center of excellence in dealer services that will provide a platform for future growth.

“This transaction leverages the expertise and experience in dealer services that iA Financial Group has built over the last 20-plus years in Canada and more recently in the U.S. through the acquisition of Dealers Assurance Company in 2018,” Ricard said in the news release.

“The U.S. market for extended auto warranties, valued at almost $39 billion, is highly-fragmented and provides significant opportunity for organic growth and consolidation,” he continued. “Our investment in IAS will enable us to be a best-in-class provider of vehicle warranty products and services.”

The company said this acquisition will be funded by iA Financial Group’s excess capital. After the transaction closes, the pro forma solvency ratio of the company will 117%.

The company expects the contribution from this acquisition to be neutral to earnings per share in the first year and accretive as of the second year.

iA Financial this transaction is expected to close in the first half of 2020, subject to obtaining the usual regulatory approvals in Canada and the United States, and other customary closing conditions.

“We look forward to this new chapter in our U.S. expansion with great optimism, combining IAS with our already well-established presence in the United States and leveraging our strong track record in dealer services in Canada,” said Mike Stickney, chief growth officer of iA Financial Group and head of the company’s U.S. operations since 2005.

“This acquisition expands our customer offering by bringing an end-to-end product suite and omni-channel distribution, as well as reinforcing our national breadth,” Stickney continued. “Along with the high-quality senior management of IAS who will be joining our organization, we will have the platform to pursue our growth strategy in the vehicle warranty market in the United States.”

Patrick Brown, president and chief executive officer of IAS, touched on what the acquisition means for that operation.

“The IAS team is excited to become part of the iA family. I am very proud of our team’s hard work and record growth the last few years,” Brown said.

“Going forward, as part of a publicly traded company with a market capitalization of more than $7.0 billion, we are well-positioned to continue the long-term support of our valued distribution partners and to deliver on our mission of empowering vehicle owners to avoid unforeseen repair costs,” he went on to say.