Willis Towers Watson, a global advisory, broking and solutions company, has acquired Tranzact, a direct-to- consumer health care organisation that links individuals to US insurance carriers.
Tranzact was acquired by its current majority owner, a Clayton, Dubilier & Rice (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.
As one of the leading players in the direct-to-consumer health care space, Tranzact employs approximately 1,300 individuals, including 850 licensed agents. Tranzact combines digital marketing, sales and data science expertise to connect individuals to leading US insurance carriers. Tranzact currently markets a wide breadth of products including Medicare Advantage, Medicare Supplement, Prescription Drug Plan (PDP) and an array of ancillary products including dental, vision, life and indemnity.
John Haley, CEO of Willis Towers Watson, says: “We are delighted to announce the acquisition of Tranzact which represents a significant growth opportunity in the direct-to-consumer US health care 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.”
David Graf, CEO of Tranzact, says: “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.”
“Under a strong leadership team, Tranzact has built a world class lead generation capability underpinned by cutting edge technology and analytics,” says Russ Fradin, CD&R Operating Partner and Chairman of Tranzact. “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.”
Gene Wickes, Head of Willis Towers Watson’s BDA segment, says: “Reaching consumers directly will significantly advance our overall growth strategy. Willis Towers Watson will now have access to an additional 35 million retirees and growing through direct-to-consumer channels and will be able to serve a diverse market that is growing at approximately 10,000 lives per day.”
The total purchase price is USD1.2 billion in closing consideration, with an additional potential earn-out of up to USD200 million payable in either cash or stock in 2021 if certain financial targets are achieved. The total purchase price includes USD1.1 billion of cash consideration and USD100 million of cash or stock consideration payable at close. Upon closing, the transaction is expected to be immediately accretive to Willis Towers Watson on an adjusted earnings per share basis.
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.
The transaction is subject to customary closing conditions and regulatory review and approvals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
