Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Merger or Acquisition (December 2019)
18 slides from Ia Financial's merger presentation, Dec 4, 2019
Slide 1: iA Financial Group establishes a leading presence in the U.S. vehicle warranty market with the acquisition of IAS
iA Financial Group establishes a leading presence in the U.S. vehicle warranty market with the acquisition of IAS December 4, 2019
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements Some of the statements contained in this Presentation, including those relating to iA Financial Corporation’s strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words su
Slide 3: Caution regarding forward-looking statements (cont.)
Caution regarding forward-looking statements (cont.) Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward- looking statements may be found in iA Financial Corporation’s
Slide 4: Presenters from iA Financial Group
Presenters from iA Financial Group Denis Ricard Jacques Potvin President Executive Vice-President Chief Executive Officer CFO and Chief Actuary 4
Slide 5: Strategic rationale for the acquisition of IAS
Strategic rationale for the acquisition of IAS Accelerates iA’s growth strategy, capitalizing on positive growth trends within the vehicle warranty market Creates a U.S. platform of scale with significant synergies to participate in future industry consolidation Diversifies iA’s product and geograph
Slide 6: Who is IAS?
acquisition Who is IAS? • One of the largest providers in the U.S. vehicle warranty market • Based in Austin, TX • Multiple-channel distribution: direct, indirect, and post-sale (direct to consumer) • Innovative data-driven product development and risk management • End-to-end product and service off
Slide 7: U.S. vehicle warranties market
acquisition U.S. vehicle warranties market Market: DAC + IAS: Hyper-fragmented with 100+ providers End-to-end product and service offering Strong tailwinds for organic growth and consolidation + Full vertical integration iA present since 2018 via DAC acquisition = Expanded revenue streams iA now pos
Slide 8: Dealer services: A growth story that began in Canada
acquisition Dealer services: A growth story that began in Canada Now being rolled out in the U.S. Building know-how since 1999 Adding scale organically and through acquisitions 9 acquisitions (C$300M) over the last 20 years Entered the U.S. Today, iA Financial Group vehicle warranty establishe
Slide 9: IAS + DAC: A strong platform in vehicle warranties
acquisition IAS + DAC: A strong platform in vehicle warranties DAC IAS 2018 coverages sold 0.5M 1.6M 2018 gross written premiums $375M $540M 2018 adjusted EBITDA $13M $60M Active dealership relationships 5,300+ 4,300+ Agent relationships 145+ 200+ Employees 152 600 States with coverage 50 50 Headqua
Slide 10: IAS + DAC: Complementary products and distribution
acquisition IAS + DAC: Complementary products and distribution DAC IAS Post-acquisition 0.5M contracts 1.6M contracts 2.1M contracts 75% 81% 55% ancillary ancillary = ancillary + warranties Products warranties warranties 37% VSC 9% 16% 9% 8% 10% GAP GAP VSC GAP VSC DAC IAS Post-acquisition $187.5M $
Slide 11: IAS + DAC: A centre of excellence in vehicle warranties
acquisition IAS + DAC: A centre of excellence in vehicle warranties DAC IAS End-to-end product offering Extensive use of data for product Retail technology innovation and risk management Marketing- M&A growth Geographic oriented expertise footprint Vertical Reinsurance integration with expertise an
Slide 12: An industry with strong growth drivers
acquisition An industry with strong growth drivers Increased dealer focus on vehicle warranties, driving higher attachment rates Increasing auto repair costs as technology in cars advances Average age of vehicles increasing ~US$39B Vehicle warranty Expanding used car market with higher maint
Slide 13: Financial overview of the transaction
acquisition Financial overview of the transaction Purchase price US$720M Source of funding Excess capital Contribution to EPS Expected to be neutral in year one and accretive thereafter 117% pro forma1: above target range of 110-116% Solvency ratio that reflects capital stability and organic capital
Slide 14: Acquisitions an important contributor to our EPS growth
acquisition Acquisitions an important contributor to our EPS growth 10% + + + ≥ 6% 3% 1% 2% organic profit annual distribution acquisitions growth improvement EPS growth 14
Slide 15: Strategic rationale for the acquisition of IAS
Strategic rationale for the acquisition of IAS Accelerates iA’s growth strategy, capitalizing on positive growth trends within the vehicle warranty market Creates a U.S. platform of scale with significant synergies to participate in future industry consolidation Diversifies iA’s product and geograph
Slide 16: Investor Relations
Investor Relations Contact Marie-Annick Bonneau Tel.: 418-684-5000, ext. 104287 Marie-Annick.Bonneau@ia.ca Next Reporting Dates Q4/2019 - February 13, 2020 Q1/2020 - May 7, 2020 Q2/2020 - July 30, 2020 Q3/2020 - November 4, 2020 For information on our earnings releases, conference calls and related
Slide 17: Non-IFRS financial information
Non-IFRS financial information iA Financial Corporation reports its financial results and statements in accordance with International Financial Reporting Standards (IFRS). It also publishes certain financial measures that are not based on IFRS (non-IFRS). A financial measure is considered a non-IFRS
Slide 18: INVESTED IN YOU.
INVESTED IN YOU.
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