{"id":21180,"date":"2023-12-27T21:57:55","date_gmt":"2023-12-27T21:57:55","guid":{"rendered":"https:\/\/www.insurance-canada.ca\/?p=79483"},"modified":"2023-12-27T21:57:55","modified_gmt":"2023-12-27T21:57:55","slug":"aon-announces-acquisition-of-nfp-a-leading-middle-market-provider-of-risk-benefits-wealth-and-retirement-plan-advisory-solutions","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2023\/12\/27\/aon-announces-acquisition-of-nfp-a-leading-middle-market-provider-of-risk-benefits-wealth-and-retirement-plan-advisory-solutions\/","title":{"rendered":"Aon announces acquisition of NFP, a leading middle-market provider of risk, benefits, wealth and retirement plan advisory solutions"},"content":{"rendered":"<h3>Aon expands worldwide property and casualty insurance market presence with the acquisition of NFP, a leading middle-market P&amp;C broker, benefits consultant, wealth manager and retirement plan advisor<\/h3>\n<ul type=\"disc\">\n<li><strong>Acquisition expands Aon\u2019s presence in large and fast-growing middle-market segment, with opportunity to enhance distribution through the firm\u2019s Aon Business Services platform to deliver more value to clients<\/strong><\/li>\n<li><strong>Brings together two cultures with a shared commitment to client excellence, colleague opportunity and a one-firm mindset<\/strong><\/li>\n<li><strong>NFP will operate as an independent but connected platform, going to market as \u201cNFP, an Aon company\u201d<\/strong><\/li>\n<li><strong>Purchase price estimated to be <span class=\"xn-money\">$13.4B<\/span> at the time of close, representing a ~15x multiple on seller-adjusted estimated EBITDA at closing<\/strong><\/li>\n<li><strong>Drives EPS accretion over the long-term and contributes to strong combined free cash flow profile from ongoing strong revenue growth&nbsp;<\/strong><\/li>\n<\/ul>\n<p>Dublin, Ireland (Dec. 20, 2023) \u2013 Aon plc, a leading global professional services firm, is pleased to announce the signing of a definitive agreement to acquire NFP, a leading middle-market &amp; and casualty broker, benefits consultant, wealth manager and retirement plan advisor, from funds affiliated with NFP\u2019s main capital sponsor, Madison Dearborn Partners (MDP), and funds affiliated with HPS Investment Partners. Under the terms of the transaction, Aon will acquire NFP for a total consideration estimated to be $13.4B at the time of close, which will be funded by $7B of cash and $6.4B of Aon stock.<\/p>\n<p>The acquisition of NFP expands Aon\u2019s presence in the large and fast-growing middle-market segment, with capabilities across risk, benefits, wealth and retirement plan advisory. The firm\u2019s Aon United strategy, Aon Business Services operating platform and investments in advanced analytics have driven a long-term track record of results and the acquisition will enable the combined firms to efficiently deliver content and capabilities to the middle-market segment. Doug Hammond, chairman and CEO of NFP, will continue to lead the business as an independent but connected platform within Aon, reporting to Eric Andersen, president of Aon.<\/p>\n<p>\u201cWe have continually evolved our leading capabilities to better serve our clients\u2019 growing needs amidst increasing volatility across the marketplace,\u201d said Greg Case, CEO of Aon. \u201cThe acquisition will advance our relevance to clients, create opportunities for our colleagues and further strengthen our shared cultural values. Doug and NFP have built an exceptional team, with a complementary one-firm mindset, and we expect to both learn from their entrepreneurial culture and share with them the depth and breadth of our capabilities to create more value for clients, colleagues and shareholders.\u201d<\/p>\n<p>NFP is a leader in property and casualty brokerage, benefits consulting, wealth management and retirement plan consulting for middle-market clients with more than 7,700 colleagues. Through strong local relationships and a people-first approach focused on well-being, belonging and impact, NFP helps companies and individuals address their most significant risk, workforce, wealth management and retirement challenges. NFP, which was founded in 1999 and is privately held, sees Aon as an ideal partner for growth and serving the dynamic needs of clients.<\/p>\n<p>\u201cThis is an exciting milestone in NFP\u2019s evolution that reflects the tremendous quality of the business we\u2019ve built and the exceptional people who drive our success,\u201d said Hammond. \u201cAon is an industry leader in delivering Risk Capital and Human Capital capabilities and this acquisition is compelling for many reasons. Our clients will benefit from Aon\u2019s global resources and distribution, while our people will have more opportunities to accelerate the growth of NFP. With aligned values and capabilities across different-sized market segments, we look forward to working with the Aon team to elevate performance and make the transaction successful for everyone involved.\u201d<\/p>\n<p>\u201cNFP has one of the most high-performing leadership teams and cultures that I\u2019ve come across in the marketplace in my 30-plus years in the business,\u201d said Andersen. \u201cNFP\u2019s team shares our one-firm mindset and commitments to client excellence and growth, and I\u2019m looking forward to working with Doug and all the colleagues at NFP when they join our firm as an Aon company.\u201d<\/p>\n<p>\u201cNFP has exceeded our expectations in every way over the past decade and is well positioned for more growth and impact as part of Aon,\u201d said Vahe A. Dombalagian, a member of the NFP board and managing director and financial services team co-head for MDP. \u201cNFP\u2019s diversified business, exceptional culture, and consultative approach to helping clients will be an outstanding addition to Aon. MDP is grateful to Scot French and HPS for their partnership as well as Doug, NFP\u2019s management team and colleagues for the value they\u2019ve created and we believe will create in the future as an Aon company.\u201d<\/p>\n<p>\u201cNFP has done an outstanding job of scaling the platform while maintaining a steadfast focus on serving its clients,\u201d said Scot French, a member of the NFP board and governing partner at HPS Investment Partners. \u201cWe believe NFP\u2019s differentiated business model and commitment to clients will be highly complementary with Aon\u2019s platform. We thank Doug and the NFP team, as well as Vahe and MDP, for the extraordinary partnership over the past seven years.\u201d<\/p>\n<p>Closing of the transaction is subject to customary conditions, including regulatory approvals, and is expected to occur in mid-2024. However, financial metrics are calculated conservatively based on a June 30, 2025, closing date. Aon and NFP will continue to operate independently until the closing date.<\/p>\n<h4><b>Shareholder Value Creation and Financial Terms<\/b><\/h4>\n<p>The transaction is expected to generate more than <span class=\"xn-money\">$2.8 billion<\/span> in value creation from the capitalized value of expected pre-tax synergies and capital structure, net of <span class=\"xn-money\">~$400 million<\/span> in expected one-time transaction and integration costs. The transaction is expected to be dilutive to adjusted EPS in 2025, breakeven in 2026, and accretive in 2027 and beyond, with positive impacts to free cash flow beginning in 2026.<\/p>\n<p>The transaction is another step in Aon\u2019s ongoing Aon United strategy and follows the recently announced restructuring charge of <span class=\"xn-money\">~$900 million<\/span>, which is expected to drive <span class=\"xn-money\">~$350 million<\/span> in annual, run-rate savings by the end of 2026. Aon maintains an ongoing commitment to long-term financial goals of mid-single or greater organic revenue growth, adjusted operating margin expansion and double-digit free cash flow.<\/p>\n<h4><b>Conference Call, Presentation Slides and Webcast Details<\/b><\/h4>\n<p>The Company will host a conference call on <span class=\"xn-chron\">Wednesday, December 20, 2023<\/span>, at <span class=\"xn-chron\">7:30 a.m., central time<\/span>. Interested parties can listen to the conference call via a live audio webcast and view the presentation slides at <span>www.aon.com<\/span>.<\/p>\n<h4><b>Advisors<\/b><\/h4>\n<p>UBS Investment Bank served as the exclusive financial advisor to Aon on the transaction. Citi served as a financial advisor and is advising Aon on the transaction financing. Cravath, Swaine &amp; Moore LLP and <span class=\"xn-person\">McDermott Will<\/span> &amp; Emery LLP acted as external legal counsel to Aon. Evercore acted as lead financial advisor with support from BofA Securities, Inc., Deutsche Bank Securities Inc., Jefferies LLC and TD Securities to NFP, Skadden, Arps, Slate, Meagher &amp; Flom LLP and Ropes &amp; Gray LLP acted as external legal counsel to NFP, and Paul, Weiss, Rifkind, Wharton &amp; Garrison LLP acted as external legal counsel to NFP\u2019s capital sponsors.<\/p>\n<h4 class=\"smallhead\"><b>About Aon<\/b><\/h4>\n<p>Aon plc <i>(NYSE:AON)<\/i> exists to shape decisions for the better \u2014 to protect and enrich the lives of people around the world. Our colleagues provide our clients in more than 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business. For more information, visit <a href=\"https:\/\/www.aon.com\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">www.aon.com<\/a>.<\/p>\n<h4 class=\"smallhead\"><b>About NFP<\/b><\/h4>\n<p>NFP is a leading property and casualty broker, benefits consultant, wealth manager, and retirement plan advisor that provides solutions enabling client success through the expertise of over 7,700 global employees, investments in innovative technologies, and enduring relationships with highly rated insurers, vendors, and financial institutions. NFP is the 9th best place to work for large employers in insurance, 7th largest privately-owned broker, 7th largest benefits broker by global revenue and 13th largest broker of US business (all rankings according to <i>Business Insurance<\/i>). For more information, visit <a href=\"https:\/\/www.nfp.com\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">nfp.com<\/a>.<\/p>\n<h4 class=\"smallhead\"><b>About Madison Dearborn Partners<\/b><\/h4>\n<p>Madison Dearborn Partners, LLC (\u201cMDP\u201d) is a leading private equity investment firm based in Chicago. Since MDP\u2019s formation in 1992, the firm has raised aggregate capital of more than $31 billion and has completed over 160 platform investments. MDP invests across five dedicated industry verticals, including financial services; basic industries; health care; technology and government solutions; and telecom, media and technology services.<\/p>\n<h4 class=\"smallhead\"><b>About HPS Investment Partners<\/b><\/h4>\n<p>HPS Investment Partners, LLC is a leading global, credit-focused alternative investment firm that seeks to provide creative capital solutions and generate attractive risk-adjusted returns for our clients. We manage various strategies across the capital structure, including privately negotiated senior debt; privately negotiated junior capital solutions in debt, preferred and equity formats; liquid credit including syndicated leveraged loans, collateralized loan obligations and high yield bonds; asset-based finance and real estate. The scale and breadth of our platform offers the flexibility to invest in companies large and small, through standard or customized solutions. At our core, we share a common thread of intellectual rigor and discipline that enables us to create value for our clients, who have entrusted us with approximately $107 billion of assets under management as of December 2023.<\/p>\n<p class=\"referencetext\"><i>SOURCE: Aon plc<\/i><\/p>\n<p> Tags: <a href=\"https:\/\/www.insurance-canada.ca\/tag\/acquisition\/\" rel=\"tag\">Acquisition<\/a>, <a href=\"https:\/\/www.insurance-canada.ca\/tag\/aon\/\" rel=\"tag\">Aon<\/a>, <a href=\"https:\/\/www.insurance-canada.ca\/tag\/brokers\/\" rel=\"tag\">Brokers<\/a>, <a href=\"https:\/\/www.insurance-canada.ca\/tag\/merger\/\" rel=\"tag\">merger<\/a>, <a href=\"https:\/\/www.insurance-canada.ca\/tag\/nfp\/\" rel=\"tag\">NFP<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Aon expands worldwide property and casualty insurance market presence with the acquisition of NFP, a leading middle-market P&amp;C broker, benefits consultant, wealth manager and retirement plan advisor Acquisition expands Aon\u2019s presence in large and&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[1],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/21180"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=21180"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/21180\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=21180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=21180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=21180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}