Willis Towers Watson PLC has agreed to buy direct-to-consumer health care organization Tranzact for $ 1.2 trillion, the brokerage said Sunday, in a deal reflecting its renewed focus on strategic mergers and acquisitions. or up to $ 200 million is payable in either cash or stock in 2021 if certain financial targets are with, Willis Towers Watson said in a statement.
The deal, which is expected in the third quarter of 2019, will see Tranzact operate as an integral part of Willis Towers Watson's benefits, delivery and administration business.
"(We said) if we were to a larger scale acquisition, it would be in an adjacent market, particularly in the market to transform existing value chains. . This fits right into that strategy, ”said John Haley, CEO of Willis Towers Watson, in a call with analysts Monday morning.
The transaction is the" right opportunity "for Willis Towers Watson and represents a significant growth opportunity, said Mr . Haley during the call.
"Since we have had good success in the employer sponsored space, we feel the direct consumer consumer space is a good adjacency given the demographics in Medicare are growing and will continue to grow for years to come , "He said.
" Already 3% of our operation is in the direct-to-consumer space. This gives us the opportunity to get in there much faster than we could on our own, ”he added.
Fort Lee, New Jersey-based Tranzact has a staff of approximately 1
In addition to its New Jersey headquarters, Tranzact has eight locations, including five sales centers across The United States and a technology development center in Peru said it had about $ 260 million in revenue or year-end 2018 and has been growing at double-digit rates in the last few years. Wickes said.
"We expect the Transactact business to grow at 25% to 30% rate for the next five years," he said, adding that the Medicare market is expansive and underperforming "huge untapped" market potential. 19659002] Willis Towers Watson leadership declined to comment on potential synergies arising from the deal during the analysts call. expertise to connect individuals to US insurers, the statement said
Willis Towers Watson is the world's third-largest insurance brokerage, according to Business Insurance 's latest ranking.