Aon nears $17B deal to buy USI Insurance
What's the story
Aon, a leading insurance broker and consultancy firm, is close to finalizing a deal to acquire USI Insurance Services from private equity firm KKR. The deal is estimated at around $17 billion, including debt, reported theWall Street Journal. An official announcement could come as early as Monday if negotiations go smoothly.
Company profiles
USI generated about $3 billion in annual revenue
USI is a Valhalla, New York-based insurance brokerage and consulting firm that specializes in risk management, employee benefits, and retirement consulting. The company generates about $3 billion in annual revenue.
KKR acquired USI from Onex Corporation in 2017 for $4.3 billion (including debt) with Canadian pension fund Caisse de depot et placement du Quebec.
Since then, KKR has invested over $1 billion more into the company to become its largest shareholder in 2023.
Financial impact
The acquisition would help Aon expand its reach
The acquisition would help Aon expand its reach into midsize businesses. It is also expected to boost the company's earnings per share as early as 2028.
Aon, which has a market cap of $75 billion, reported second-quarter adjusted earnings of $3.81 per share on July 29, beating Wall Street analysts' estimates.
However, the stock has since fallen by 5.6%, closing at $355.4 on Friday.