AmTrust Financial buys Warrantech

NEW YORK -- AmTrust Financial Services Inc. said Thursday it bought the remaining stake in Warrantech Corp., giving it full ownership of the Texas-based service contracts administrator.

AmTrust already owned a 27 percent stake in Warrantech and acquired the remaining 73 percent ownership interest through subsidiary AMT Warranty Corp. for $7.5 million in cash.

The transaction costs include an earn-out payment to the sellers ranging from $2 million to $3 million based on AMT Warranty's earnings before interest, taxes, depreciation and amortization. In addition, the AmTrust will transfer a $24.1 million note receivable from Warrantech to AMT Warranty.

Warrantech, based in Bedford, Texas, largely administers service contracts and aftermarket warranty products for the automotive and consumer products industry in the U.S. and Canada.

AmTrust shares slipped 3 cents to $13.48 on Thursday.