Willis Towers Watson acquires TRANZACT

10 April 2019 — Cosmin CONCEATU
Willis Towers Watson is acquiring TRANZACT for USD 1.2 billion in closing consideration, with potential earn-out of up to USD 200 million, payable in either cash or stock by 2021, if certain financial targets are achieved.

TRANZACT was acquired by its current majority owner, CD&R fund, in 2016. TRANZACT will operate as an integral part of Willis Towers Watson's Benefits Delivery and Administration (BDA) business, which focuses on the development and delivery of administrative solutions for employers, employees and retirees.

The total purchase price includes USD 1.1 billion in cash and USD 100 million in cash or stock payable at close. Upon closing, the transaction is expected to be immediately accretive to Willis Towers Watson on an adjusted earnings per share basis.

The transaction is subject to customary closing conditions and regulatory review and approvals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act. Willis Towers Watson has committed term loan financing from BofA Merrill Lynch to complete the transaction. The transaction is expected to close in the third quarter of 2019.

"We are delighted to announce the acquisition of TRANZACT, which represents a significant growth opportunity in direct-to-consumer U.S. healthcare space and speaks to Willis Towers Watson's renewed focus on strategic M&A opportunities. This deal will accelerate our direct-to-consumer strategy and help create an end-to-end consumer acquisition platform," said John HALEY, CEO of Willis Towers Watson.

"We believe joining our complementary strengths and strategies will greatly benefit TRANZACT's carriers and consumers. The powerful combination of our technology-driven, direct-to-consumer solutions and Willis Towers Watson's scale, leading infrastructure and participant engagement capabilities creates a unique and differentiated capability in the marketplace," said David GRAF, CEO of TRANZACT.

"Under a strong leadership team, TRANZACT has built a world class lead generation capability, underpinned by cutting edge technology and analytics. We see a bright future for TRANZACT and its valued consumers as part of Willis Towers Watson. The CD&R team looks forward to working closely with Willis Towers Watson to help with integration and growth through 2020," said Russ FRADIN, CD&R Operating Partner and Chairman of TRANZACT.

Source: Willis Towers Watson

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