The Allstate Corp. has agreed to acquire InfoArmor, a provider of employee identity protection, for $525 million in cash.
The insurer said it sees “significant opportunity to cross sell” the new product through its own Allstate Benefits customer relationships and will consider future expansion through Allstate’s businesses.
InfoArmor currently provides its product to more than one million employees at over 1,400 firms, including more than 100 of the Fortune 500 companies. It offers its products primarily through the employee benefits channel. Its identity protection services include monitoring, alerts, remediation and a proprietary “Identity Health Score.”
Allstate Benefits business now serves more than one million employees.
The private company, headquartered in Scottsdale, Arizona, said its revenue has been growing over the last three years and is forecasted to reach $65 million in 2018.
Allstate expects the transaction to close later this year.
Allstate cited statistics that last year there were 16 million victims of identity fraud, resulting in $16 billion in losses. Allstate sees the U.S identity protection market as underserved with potential for rapid growth. InfoArmor competes against a variety of identity protection providers including LifeLock, IDShield, ID Watchdog, Credit Karma and credit bureaus.
“With the acquisition of InfoArmor, Allstate will protect more customers from this risk and help rebuild their lives after they have been hacked,” said Tom Wilson, chairman, president and CEO of Allstate. “InfoArmor is the go-to identity protection company in the employee benefits market, providing an opportunity to expand the Allstate Benefits business now serving over 4 million employees.”
John Schreiber, CEO of InfoArmor, said his firm’s relationships with top benefit brokers will be enhanced by access to the Allstate Benefits distribution network.
InfoArmor’s existing management team will remain in place.
Keefe, Bruyette & Woods analyst Meyer Shields said the deal, albeit small, “looks a little expensive.” But noted that Allstate’s analytical capabilities should boost InfoArmor’s sales.
Shields also said he views the deal as consistent with Allstate’s focus on diversifying its product portfolio.
The acquisition is in keeping with Wilson’s strategy of offering more consumer protection products and services. In 2014, Allstate paid $1.4 billion for mobile device insurer SquareTrade Holding Co. In 2016, the insurer began offering an app that allows consumers to receive car repair price quotes and schedule repairs. Also, the Allstate telematics app known as Drivewise allows drivers to earn safe driving points they can spend on merchandise, gift cards and local merchant offers.