Professional services firm Aon plc (AON) announced Wednesday the signing of a definitive agreement to acquire NFP from funds affiliated with NFP's main capital sponsor, Madison Dearborn Partners (MDP), and funds affiliated with HPS Investment Partners.
NFP is a leading middle market property and casualty broker, benefits consultant, wealth manager and retirement plan advisor.
Under the terms of the transaction, Aon will acquire NFP for a total consideration estimated to be $13.4 billion at the time of close, which will be funded by $7 billion of cash and $6.4 billion of Aon stock.
The acquisition of NFP expands Aon's presence in the large and fast-growing middle-market segment, with capabilities across risk, benefits, wealth and retirement plan advisory.
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.
The closing of the transaction is subject to customary conditions, including regulatory approvals, and is expected to occur in mid-2024. Aon and NFP will continue to operate independently until the closing date.
The transaction is expected to generate more than $2.8 billion in value creation from the capitalized value of expected pre-tax synergies and capital structure, net of about $400 million 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.
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