Canadian private equity investment firm Onex Corp OCX.TO said it would sell The Warranty Group, a provider of extended warranty contracts, to an affiliate of TPG Capital Management LPTPG.UL for an enterprise value of about $1.5 billion.
The deal value includes earnings the business generates from December 31, 2013 until the expected closing of the deal in the third quarter of the year.
Onex bought The Warranty Group from insurance broker Aon Plc (AON.N) in 2006 for $710 million, of which Onex Corp and its affiliates contributed $498 million.
Onex Corp will get about $385 million of the proceeds, the company said in a statement on Friday.
The Warranty Group provides extended warranty contracts for an array of consumer goods, including automobiles, consumer electronics and major home appliances. It also provides credit insurance and other specialty insurance products.
The 50-year old Chicago-based company has more than 1,900 employees and operations in 32 countries, according to its website.
Reuters reported in September that Onex had hired banks including Morgan Stanley to find a buyer for The Warranty Group.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Savio D'Souza)