Lemonade, a full-stack insurer that provides a range of insurance products such as renters, homeowners, life, car, and pet insurance, has announced the closing of the acquisition of Metromile, a pay-per-mile automobile insurance provider, in an all-share transaction valued at USD 145 million or 7.3 million Lemonade shares, excluding cash, worth USD 150 million.

Through the acquisition, Lemonade aims to bolster its auto insurance offerings by using Metromile’s vast amount of driving data to offer competitive and precise policies and benefit from Metromile’s written premiums of over USD 110 million and insurance licenses in 49 states, compared to the three it owns in Ohio, Illinois, and Tennessee, accelerating its speed to the market throughout the US.

Most employees of Metromile will transfer to roles at Lemonade, while Metromile CEO Dan Preston will assume the role of senior vice president of strategic initiatives. The Metromile app will be available until all its customers transition to the Lemonade app. The Metromile common stock (MILE) ceased trading on the Nasdaq on July 27, 2022.

Analyst QuickTake: The closing transaction value of USD 145 million represents a 71% discount to the initial valuation of USD 500 million (~USD 200 million net of cash), evidenced by similar declines in share prices of both Lemonade and Metromile since the announcement in November 2021 . However, the transaction represents a ~6% premium over Metromile’s market capitalization of USD 137 million on its last trading date.