Blackstone Group LP (BX) recently declared that private equity funds associated with Blackstone have reached a definitive agreement to acquire Aon plc’s (AON) technology-facilitated benefits and human resources (“HR”) platform, presently part of Aon Hewitt, for cash consideration of up to $4.8 billion, counting $4.3 billion at closing and additional consideration of up to $500 million based on future performance.
The business is the leading benefits administration platform in the United States, and a leading services provider for cloud-based HR administration systems. It serves about 15 percent of the U.S. working population across more than 1,400 companies. Aon and the new, stand-alone company will continue to work together on behalf of shared clients and prospects.
Peter Wallace, a Senior Managing Director at Blackstone, said, “We are excited to acquire a world-class leader of scale in health, retirement, and HR services, providing critical human resources and benefits administration services to millions of employees and their families throughout the United States and Canada. Blackstone sees tremendous opportunity for investing in leading businesses within the technology-facilitated services sector, where we believe there is a noteworthyopportunity to accelerate future growth. We look forward to working with the excellent administration team to continue to invest in and grow the company.”
David Kestnbaum, a Managing Director at Blackstone, said, “Through this investment and partnership, we will seek to leverage our global relationships, operational support, and strong capital base to accelerate growth in the business. We are happy to invest in this market leading business that provides an important suite of services to a broad range of blue-chip clients. Our focus will be on ensuring continued delivery of best-in-class services to clients, while also innovating new service lines and strategies to expand the company’s capabilities.”
Aon plc, President & CEO Greg Case said, “This transaction sharpens our focus on growing our core professional services capabilities and accelerates our ability to invest in emerging client needs, while ensuring that clients continue to receive the level of service and performance they have come to expect. We believe that this platform will thrive under Blackstone’s ownership as a focused, standalone company and look forward to working with the expert administration team in place to support our shared clients and prospects.”
Aon’s Chris Michalak, CEO of the new, standalone business said, “The opportunity before us is tremendous. Under new ownership with Blackstone, our clients will benefit from raised focus, innovation and investment in our already market-leading benefits and HR administration solutions. I am excited to lead our team of 22,000 colleagues forward into this new era with Blackstone.”
Citigroup, Credit Suisse, and SMB Capital are acting as financial advisors to Blackstone with respect to the transaction, and Kirkland & Ellis LLP is acting as Blackstone’s legal counsel. Morgan Stanley is acting as financial advisor to Aon with respect to the transaction, and Sidley Austin LLP is acting as Aon’s legal counsel. Debt financing related to the transaction is being offered by BofA Merrill Lynch, Barclays, Credit Suisse, Citigroup, Macquarie, Deutsche Bank, and Morgan Stanley.
The transaction is expected to close by the end of the second quarter of 2017.
Metlife Inc (MET) provides life insurance, annuities, employee benefits, and asset administration products in the United States, Japan, Latin America, Asia, Europe, and the Middle East. It operates in six segments: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; Latin America; Asia; and Europe, the Middle East and Africa. The company provides variable, universal, term, and whole life products; individual disability income products; personal lines property and casualty insurance, counting private passenger automobile, homeowners, and personal excess liability insurance; and variable and fixed annuities for asset accumulation and distribution needs, in addition to mutual funds and other securities products. It also offers group insurance products, such as variable, universal, and term life products; dental, group short- and long-term disability, and accidental death and dismemberment coverages; and voluntary and worksite products consisting of personal lines property and casualty insurance, in addition to LTC, prepaid legal plans, and critical illness products. In addition, the company provides annuity and investment products comprising guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment administration of defined benefit and defined contribution plan assets; and structured settlements and products to fund postretirement benefits and company-, bank- or trust-owned life insurance, in addition to health insurance, group medical, credit insurance, endowment, retirement, and savings products. It serves individuals and corporations, in addition to other institutions and their employees. The company sells its products through sales forces, third-party organizations, independent agents, and property and casualty specialists, in addition to through career agency, bancassurance, direct marketing, brokerage, and e-commerce channels. MetLife, Inc. was founded in 1863 and is based in New York, New York.