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Aon to divest benefits administration and HR BPO platform to Blackstone for $4.8bn

IBR Staff Writer Published 13 February 2017

UK based global insurance broker Aon has agreed to divest its benefits administration and HR Business Process Outsourcing (BPO) platform to American private equity firm Blackstone for around $4.8bn.

Blackstone will initially pay $4.3bn at the closing of the deal. The company has also agreed to pay up to $500m to Aon based on future performance of the acquired business.

Aon president and CEO Greg Case said: "This transaction reinforces Aon's position as the leading, global professional services firm focused on risk, retirement and health.

"The sale of our outsourcing platform creates incremental capital to strengthen growth in core operations, and accelerates the pursuit of inorganic growth opportunities that address emerging client needs, similar to recent acquisitions in cyber risk advisory and health brokerage solutions."

The Aon’s benefits business is claimed to be the largest benefits administration platform in the US besides being a major services provider for cloud-based HR management systems.

Blackstone will create a new standalone business from the new acquisition which will be led by Aon’s Chris Michalak who will be the CEO.

Blackstone senior managing director Peter Wallace said: “Blackstone sees tremendous opportunity for investing in leading businesses within the technology-enabled services sector, where we believe there is a significant opportunity to accelerate future growth.  We look forward to working with the excellent management team to continue to invest in and grow the company.”

Following the acquisition by Blackstone, Aon will continue to work together with the stand-alone company on behalf of prospects and shared clients.

Aon expects to raise net proceeds of nearly $3bn after tax considerations from the sale, a part of it will be used for its share repurchasing program.

The deal is likely to be completed by the end of the second quarter provided it meets customary closing conditions and specified antitrust clearances.

Image: Blackstone to acquire Aon’s benefits business. Photo: courtesy of stockimages/Freedigitalphotos.net.