Onex Corp., Canada’s biggest buyout firm, agreed to sell insurer Warranty Group to an affiliate of TPG Capital in a deal valuing the company at $1.5 billion, more than tripling its money.
The deal value includes earnings Warranty Group produces from the end of last year through the closing, which is expected in the third quarter of 2014, Toronto-based Onex said today in a statement.
Onex, which manages about $19 billion in assets, made a $498 million equity investment in Chicago-based Warranty Group in November 2006. Investors will have received proceeds of about $1.5 billion when the sale is completed, translating into an 18 percent rate of return, Onex said. The return includes $403 million in distributions the company paid Onex, the firm said.
Warranty Group underwrites and administers extended warranty contracts. TPG, led by David Bonderman and based in Fort Worth, Texas, and San Francisco, oversees more than $59 billion in investors’ capital, according to the firm’s website.