Willis Towers Watson (NASDAQ: WLTW), a global advisory, broking and solutions company, acquired Tranzact, a direct-to-consumer health care organization that links individuals to U.S. insurance carriers.
The total purchase price is $1.2 billion in closing consideration, with an additional potential earn-out of up to $200m payable in either cash or stock in 2021 if certain financial targets are achieved.
The total purchase price includes $1.1 billion of cash consideration and $100m of cash or stock consideration payable at close.
Tranzact was acquired by its current majority owner, a Clayton, Dubilier & Rice (CD&R) fund, in 2016. The deal will accelerate direct-to-consumer strategy and the ability to target the entire Medicare market of approximately 50 million lives.
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.
A leading player in the direct-to-consumer health care space, Tranzact combines digital marketing, sales and data science expertise to connect individuals to U.S. insurance carriers. It currently markets a wide range of products including Medicare Advantage, Medicare Supplement, Prescription Drug Plan (PDP) and an array of ancillary products including dental, vision, life and indemnity.
Led by David Graf, CEO, and Russ Fradin, CD&R Operating Partner and Chairman, the company employs approximately 1,300 individuals, including 850 licensed agents.
Led by John Haley, CEO, Willis Towers Watson is a global advisory, broking and solutions company that has over 45,000 employees serving more than 140 countries and markets. It designs and delivers solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals.
Willis Towers Watson has committed term loan financing from BofA Merrill Lynch to complete the transaction. The transaction – subject to customary closing conditions and regulatory review and approvals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act – is expected to close in the third quarter of 2019.