Willis Towers Watson has acquired TRANZACT, a direct-to-consumer health care organisation that links individuals to US insurance carriers, for a total consideration of $1.2bn.
The total purchase price involves cash consideration of $1.1bn and $100m of cash or stock consideration, which is payable at close.
As per the terms of the agreement, TRANZACT is also eligible to receive an additional payment of up to $200m in 2021 if it achieves certain financial targets.
TRANZACT will now become part of Willis Towers Watson’s Benefits Delivery and Administration (BDA) business.
TRANZACT was bough by its current majority owner, a Clayton, Dubilier & Rice (CD&R) fund, in 2016.
The acquired entity employs nearly 1,300 people, including 850 licensed agents. It 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.
Willis Towers Watson CEO John Haley said: “We are delighted to announce the acquisition of TRANZACT which represents a significant growth opportunity in the direct-to-consumer U.S. 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.”
TRANZACT CEO David Graf said: “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.”