Editors' note: A full version of this article, including a full roster of adviser names, was originally published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration. Click here for a free trial.

Property insurer Allstate Corp. (ALL) - Get Report may seek other deals to expand its brand, after it agreed to purchase electronic device warranty company SquareTrade Inc. for $1.4 billion from Bain Capital LP.

"My guess is that there is probably going to be additional brand extension-type deals like this," said Cathy Seifert, an analyst with CFRA Research said. "I would not be surprised to see other deals like this that help them grow and grow in areas where they are not quite as price competitive as the personal line insurance market."

The acquisition of SquareTrade, announced Monday, will allow Northbrook, Ill.-based Allstate to take advantage of SquareTrade's relationships with large retailers like CostcoWholesale Corp. (COST) - Get Report , TargetCorp. (TGT) - Get Report , and Amazon Inc. (AMZN) - Get Report , where it sells insurance policies directly to customers at the point-of-sale or by working through online retailers.

Seifert said there is an opportunity for Allstate to grow in a less competitive market of insuring electronic devices, while expanding into other markets. 

San Francisco-based SquareTrade, a privately held company, will be purchased from Bain affiliates Bain Capital Private Equity and Bain Capital Ventures using cash and the issuance of $1 billion in senior debt. The sale is expected to be completed in January 2017.

Bain acquired an undisclosed stake in the company in 2012 in exchange for an $238 million equity investment.

"The acquisition of SquareTrade furthers our consumer-focus strategy, extends our protection offerings, and gives us a new distribution channel," Tom Wilson, Allstate chairman and chief executive officer said on a conference call Tuesday. "The purchase price does reflect the expectation that we'll maintain rapid growth, some of which will be realized through existing distribution relationships."

While the property and casualty insurer said the purchase will not have an impact on its share repurchase program, it did say the purchase will be "modestly dilutive" to earnings over the next three years. 

"We are not surprised Allstate is making an acquisition of this size given the lighter buyback authorization and shift in tone towards M&A beginning earlier this year," Ryan Tunis of Credit Suisse Group AG wrote in a note. Credit Suisse maintains an outperform rating on the stock with a price target of $73. Allstate shares were down 3.6% to $69.48 following news of the deal.

Tunis highlights that the $1.5 billion share repurchase authorization by Allstate in May was lower than expected.

"While it may be disappointing that an acquisition of this size is not earnings accretive, we note that other more conventional acquisition opportunities around commercial/home/auto likely wouldn't address longer term secular growth headwinds concerns," Tunis wrote. "A deal of this size deserves careful scrutiny; but there's a path to more reward if Allstate is able to penetrate new distribution channels in a meaningful way."

Seifert also said that she is not "thrilled" with the dilutive effect the transaction will have on earnings over the next three year as it seems like a "long time."

SquareTrade was founded in 1999 by current executive chairman Steve Abernethy and president and CEO Ahmed Khaishgi, who will continue to stay on the management team following the acquisition. SquareTrade currently has 25 million protection plans, according to the press release. SquareTrade offers protection plans on computers, home entertainment systems, smartphone, tablets, portable audio players, cameras, wearable devices, and appliances. 

Allstate was advised by Ardea Partners LLC, Willkie Farr & Gallagher LLP, and Lazard.

Financial Technology Partners LP, which advised SquareTrade on its initial deal with Bain in 2012, provided financial advice to SquareTrade. Ropes & Gray LLP provided legal advice to the target.