AmTrust Financial acquires total ownership interest in Warrantech

Aug 27, 2010 (Datamonitor via COMTEX) -- AmTrust Financial Services, a multinational insurance holding company, through its subsidiary, AMT Warranty has acquired the remaining 73% ownership interest in Warrantech, bringing its total ownership interest to 100%.

Warrantech is a Bedford, Texas-based developer, marketer, and third party administrator of service contracts and aftermarket warranty products that serves the consumer products and automotive industries in the US and Canada.

The transaction was funded with a net $7.5 million in cash and includes an earnout payment to the sellers of a minimum of $2 million with a maximum of $3 million based on AMT Warranty earnings before interest, taxes, depreciation, and amortization. Immediately following the transaction, the company's existing $24.1 million note receivable from Warrantech was transferred to AMT Warranty.

Barry Zyskind, president and CEO of AmTrust Financial Services, said: "We are excited about the additional revenue opportunities and diversification that the Warrantech transaction provides. By bringing together these two robust warranty administration platforms, we expect to significantly increase our fee income and benefit from enhanced scale and technology efficiencies while further strengthening AmTrust's market presence and premium opportunities in the warranty space."

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