Blackstone to Buy Aon's Human Resources Outsourcing Platform for $4.3 Billion
February 10 2017 - 7:40AM
Dow Jones News
By Joshua Jamerson
Aon PLC said Friday it reached an agreement to sell its human
resources outsourcing platform to Blackstone Group L.P. for $4.3
billion, establishing the unit as a new stand-alone company.
Under the terms of the deal, Aon could receive up to $500
million in additional proceeds based on future performance. The
transaction, subject to antitrust clearance, is expected to close
in the second quarter of 2017.
Blackstone said Aon's technology-enabled benefits and human
resources platform, currently part of Aon Hewitt, is the largest
benefits administration platform in the U.S.
Aon said it expects the transaction to improve its return on
invested capital and add to adjusted earnings in 2018, citing
deployment of free cash flow from operations and transaction
proceeds, savings from operating model improvements and a lower
effective tax rate.
"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 cyberrisk advisory
and health brokerage solutions," said Greg Case, Aon's chief
executive.
Aon also reported results for the fourth-quarter. Aon reported
net income of $502 million, down 14% from $584 million a year ago.
On an adjusted, per-share basis, the firm earned $2.56 a share.
Analysts, polled by Thomson Reuters, expected $2.49 a share.
Revenue rose 1% to $3.32 billion, as analysts expected $3.41
billion.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
February 10, 2017 07:25 ET (12:25 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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