decor decor
"A business that makes nothing but money is a poor business."

-Henry Ford

February 26,2017

Blackstone Said to Acquire Aon’s Benefits Outsourcing Business

Financial Information*
  • Enterprise Value                          $4.8 billion
Transaction Facts
  • According to a report in Reuters Thursday, private equity firm Blackstone Group LP (NYSE: BX)  has agreed to acquire the employee benefits outsourcing business of Aon Plc (NYSE: AON)
  • The report comes on the eve of Aon’s Q4 2016 earnings announcement, which is expected to be released before the market opens on Feb. 10, 2017.
  • Aon is an insurance brokerage headquartered in London and active in 120 countries. It acquired the benefits outsourcing business it is selling to Blackstone in its 2010 acquisition of Hewitt Associates for $4.9 billion.
  • The employee benefits outsourcing business processes work benefits for 15 percent of the population of the US.
All About Focus
  • Cutting Loose the Anchor: Benefits outsourcing is a mature industry and is capital-intensive – two factors that limit its appeal to strategic owners. Aon’s acquisition of Hewitt was designed to increase synergies and broaden its consulting portfolio – but today, a sale would free up capital for investment in hotter growth areas such as cybersecurity or health insurance.
  • Surprise!: Though the sale is not a surprise – media reports earlier this month reported that the sale was nearly complete – the buyer’s identity is. Previous reports had fingered Clayton Dubilier & Rice as the winner, with operating partner Russell Fradin having the advantage of being Aon Hewitt’s CEO from 2006 – 2011.
  • Beauty in the Eye of the Beholder: Though strategics have been less interested in administrative outsourcing companies, private equity firms have swept in to meet demand attracted by strong cash flows. Previous similar transactions include September’s acquisition of a minority stake in Sedgwick Claims Management Services (owned by KKR and Stone Point Capital) by Canadian pension fund manager Caisse de dépôt et placement du Québec.
For more information about this transaction, click here to read the article .
*Financial information from Reuters report.
martinwolf was not the advisor in this transaction.
previous post Back to Articles next post

09 May 2023

DynamicsCon LIVE Conference Information

martinwolf will be attending the DynamicsCon LIVE conference in Scottsdale May 22-25. Book a confidential one-on-one meeting with Michael Rosholt to learn about market trends, current valuations, and how to prepare for a sale.    DynamicsCon attendees are also eligible for a complementary M&A Readiness Scorecard from martinwolf.   Contact Michael Rosholt at mrosholt@martinwolf.com to...

22 Feb 2023

How Microsoft Channel Partners Can Command High Valuations

In today’s rapidly changing ecosystem, simple organic growth doesn’t give Microsoft Channel Partners long-term competitive advantage.   During the last five years, Microsoft Channel Partners have commanded high valuations due to strong and sustainable business models, as well as a track record of profitability. Most were small mid-market businesses that had to decide to be...

31 Jan 2023

Rising Interest Rates Chill Private Equity Pace

After a year of strength on the private equity front, 2022 is now in the rearview mirror and industry professionals anticipate a downgrade in performance for the coming year.   Despite the fluctuations of the past few years, private equity has withstood the challenges relatively well. However, in certain areas such as exit activity and...