Deals and People

Aon Benefits and HR Business to Be Acquired by Blackstone

Aon plc, President & CEO Greg Case said, "We believe that this platform will thrive under Blackstone’s ownership as a focused, standalone company."

By Rebecca Moore editors@assetinternational.com | February 10, 2017

Private equity funds affiliated with Blackstone, an investment firm, have entered into a definitive agreement to acquire Aon plc’s technology-enabled benefits and human resources platform, currently part of Aon Hewitt.

According to the announcement, the business is the largest benefits administration platform in the United States, and a leading services provider for cloud-based HR management systems. It serves approximately 15% of the U.S. working population across more than 1,400 companies. Aon and the new, stand-alone company will continue to work together on behalf of shared clients and prospects.

Peter Wallace, a senior managing director at Blackstone, tells PLANADVISER, there is no name for the new standalone business yet; it will continue to trade as Aon Hewitt for a while. The acquisition includes defined benefit (DB) and defined contribution (DC) plan administration and recordkeeping as well as administration of Aon Hewitt’s private health care exchange. Wallace says Aon will retain the exchange itself. Aon will continue consulting for retirement plans.

“Our view is that this is a tremendous opportunity for human capital technology and administrative solutions. We think this is best platform in the entire world with deep domain expertise,” Wallace says. “We will be able to increase investment and innovation to better serve client needs and provide better health and financial outcomes, beyond what Aon has done to date.”

Aon employees who work within these businesses will be a part of the new entity, Wallace says.

Aon plc, President & CEO Greg Case said, “This transaction sharpens our focus on growing our core professional services capabilities and accelerates our ability to invest in emerging client needs, while ensuring that clients continue to receive the level of service and performance they have come to expect. We believe that this platform will thrive under Blackstone’s ownership as a focused, standalone company and look forward to working with the expert management team in place to support our shared clients and prospects.”

Aon’s Chris Michalak will be CEO of the new, standalone business and lead a team of 22,000. A new fact sheet from Aon says it serves more than 19 million plan participants.

Asked for comment from Aon, it said, “The information available about this announcement can be found at www.aon.com/acceleratinginnovation. We will have additional information to share upon close.” The transaction is expected to close by the end of the second quarter of 2017. The website says this transaction sharpens its focus on delivering advice and solutions, accelerates innovation on behalf of clients and improves return on invested capital.