Allstate Corp to Buy SquareTrade in $1.4 Billion Deal

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Allstate Corp (NYSE:ALL) has announced a major acquisition that will boost the company’s insurance business for personal products.

AllstateThe company will shell out $1.4 billion for SquareTrade Holding, which offers extended warranties on personal tech products and gadgets, including tablets, smartphones, watches and more.

Apart from adding to Allstate’s portfolio, the SquareTrade takeover will help the company break ground in new markets. The move is expected to help the company dilute its earnings per share for three years.

SquareTrade is based on San Francisco and it was founded in 1999. The company offers insurance for products acquired via several major retailers, including Amazon.com, Inc. (NASDAQ:AMZN), Costco Wholesale Corporation (NASDAQ:COST) and Target Corporation (NYSE:TGT).

Allstate is announcing its third-quarter earnings of its fiscal year 2016 on Wednesday. Wall Street is calling for earnings of $1.18 per share, while revenue is slated to come in at around $8.35 billion over the period.

Earnings were last reported by the company in early August, when Allstate exceeded expectations at 58 cents per share, four cents above estimates. The company had a return on equity of 9.94% and a net margin of 4.63%.

Earnings came in at 62 cents per share in the year-ago quarter.Net sales of insurance and other products tallied up to $9.16 billion for the quarter, which was more than $1 billion higher than what analysts were calling for.

Analysts predict the company will earn $4.34 per share for the full year.

ALL stock slipped 3.4% Tuesday.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/11/allstate-squaretrade-all-stock/.

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