Prudential Financial, Inc., has signed a definitive agreement to acquire Assurance IQ, Inc., a direct-to-consumer platform for individuals seeking personalized health and financial wellness solutions.
Terms of the acquisition included a total upfront consideration of $2.35 billion, plus an additional earnout of up to $1.15 billion in cash and equity, contingent upon Assurance achieving multi-year growth objectives.
In a statement, Prudential explained that Assurance matches buyers with customized solutions spanning life, health, Medicare, and auto insurance, giving them options to purchase entirely online or with the help of a technology-assisted live agent.
According to Prudential, "Assurance's technology-driven, on-demand service platform lowers the cost of customer acquisition, allowing deeper reach into the mass market while maintaining a high level of service and product selection."
"Assurance accelerates the strategy and growth potential of Prudential's financial wellness businesses, bringing us closer to more people across the entire socio-economic spectrum to better serve the full picture of their needs," said Prudential's chair and chief executive officer, Charles Lowrey. "We look forward to working with Mike Rowell and his entire team to grow the Assurance business in the U.S., and, over time, to extend its unique approach to customers around the world."
Michael Rowell, co-founder and chief executive officer of Assurance, said, "Assurance was founded to protect and improve the personal and financial health of every individual. 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 said that it plans to offer its own financial wellness solutions on the Assurance platform alongside those of third-party providers.
Prudential said that additional details of the transaction included:
- Under the terms of the agreement, Assurance will become a wholly owned subsidiary of Prudential under the U.S. businesses division. Assurance co-founders Mr. Rowell and Michael Paulus will continue to focus on the growth of Assurance. Mr. Rowell will remain chief executive officer of Assurance and will report to Andrew Sullivan, who will assume the role of executive vice president and head of U.S. businesses as of December 1. Mr. Paulus will remain president of Assurance.
- Prudential plans to use a combination of its current cash, debt financing, and equity to fund the acquisition, which is expected to close early in the fourth quarter of 2019. Prudential's board of directors unanimously approved the transaction.
- Prudential's board of directors has authorized a $500 million increase to its share repurchase authorization for calendar year 2019. As a result, the share repurchase authorization for the full year 2019 is $2.5 billion. As of June 30, 2019, Prudential had repurchased $1.0 billion of shares of its common stock under this authorization. Prudential expects to fully utilize this increased share repurchase authorization by the end of 2019.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].