Global re/insurance brokerage Willis Towers Watson (WTW) has announced the completion of its acquisition of TRANZACT, a direct-to-consumer health care organisation.
First announced back in April 2019, the deal had originally been valued at $1.2 billion.
However, WTW revealed in its second quarter results report that it had amended the earn-out provision portion of the agreement to lower the potential earn-out from $200 million to approximately $17 million.
Accordingly, the broker agreed to pay an additional $117.5 million in up-front purchase price, bringing the total value of the acquisition to $1.3175 billion at closing.
WTW explained the amendment would allow it to reduce its earn-out exposure and lower the potential overall consideration paid for TRANZACT by approximately $65.5 million if the full earn-out objectives are achieved.
Going forward, TRANZACT will operate as part of WTW’s Benefits Delivery and Administration (BDA) business, which focuses on the development and delivery of administrative solutions for employers, employees and retirees.
The company will continue to use the TRANZACT brand in the market.
“We are happy to announce that Willis Towers Watson has closed its acquisition of TRANZACT,” said Gene Wickes, head of Willis Towers Watson’s BDA segment.
“We are excited to welcome the TRANZACT team into Willis Towers Watson and work together to further their capabilities and proven success in the direct-to-consumer U.S. health care market — a significant growth opportunity for us going forward.”
TRANZACT markets a range of products, including Medicare Advantage, Medicare Supplement and Prescription Drug Plan, as well as ancillary products such as dental, vision, life and indemnity. It employs approximately 1,300 individuals, including 850 licensed agents.
