Aon to Acquire NFP for $13.4B

Aon plc is set to acquire retirement, insurance, and wealth advisory NFP for an estimated purchase price of $13.4 billion, the firms announced Wednesday.

The deal will be funded by $7 billion in cash and $6.4 billion in Aon stock, including funds affiliated with NFP’s main capital sponsor, Madison Dearborn Partners, and funds affiliated with HPS Investment Partners, according to the announcement. Aon, a global provider of risk, retirement, and health solutions to employers, will bring NFP’s more than 7,700 employees and more than $2.2 billion in revenue to the firm, according to details released on an Aon conference call.

NFP will continue to operate as an independent company on a “connected platform” with Aon and will go to market as NFP, an Aon company. Doug Hammond, chairman and CEO of NFP, will continue to lead the business, reporting to Eric Andersen, president of Aon.

London-based Aon makes the move with the goal of expanding its business among large- and middle-market employers seeking services in insurance, health benefits, wealth and retirement advisement, the firm announced on the call. The firm noted progress it has made in building its Aon Business Services platform that will work well with NFP’s larger pool of clients.

“Given the investment in Aon Business Services, we are now in a position to deliver the same content and capabilities we deliver to large clients efficiently to middle market clients through NFP,” the firm wrote in a presentation announcing the deal.

In the presentation, Aon pegged the middle market for risk, wealth and health at $30 billion and “growing quickly,” presenting its business division as poised to “enhance distribution” to clients.

“We have continually evolved our leading capabilities to better serve our clients’ growing needs amidst increasing volatility across the marketplace,” Greg Case, Aon’s CEO, said on the call. “The acquisition will advance our relevance to clients, create opportunities for our colleagues and further strengthen our shared cultural values.”Aon noted on the call that the transaction is “financially attractive” due to expected contributions to revenue growth and long-term free cash flow generation.

New York-based NFP was founded in 1999 and was acquired by Madison Dearborn Partners in 2013 for $1.3 billion. The firm has been active in the acquisition trend bringing together employee benefits and wealth management with the acquisition of Divergent Wealth Advisors LLC in September and Wealthspire Advisors in June.

The firm’s wealth and retirement division has more than $50 billion in assets under management and $400 billion of assets under advisement, according to Wednesday’s presentation.

“This is an exciting milestone in NFP’s evolution that reflects the tremendous quality of the business we’ve built and the exceptional people who drive our success,” Hammond said in a statement. “Our clients will benefit from Aon’s global resources and distribution, while our people will have more opportunities to accelerate the growth of NFP.”

The transaction is subject to conditions, including regulatory approvals, and is expected to be finalized in mid-2024, according to Aon. The firms will continue to operate independently until the closing date.