WTW Announces Agreement to Sell TRANZACT
WTW (NASDAQ: WTW) has announced an agreement to sell its TRANZACT direct-to-consumer insurance distribution business to GTCR and Recognize for $632.4 million, subject to adjustments. The divestiture aims to sharpen WTW's strategic focus on core business-to-business and business-to-business-to-consumer offerings, simplify its portfolio, and accelerate progress toward long-term free cash flow margin goals.
The transaction is expected to close by the end of 2024, pending regulatory approvals and customary closing conditions. WTW anticipates recording non-cash pre-tax losses and related impairment charges estimated between $1.6 billion and $2.1 billion in the third quarter of 2024, with updates until the closing date. BofA Securities and Lazard are serving as financial advisors, while Weil, Gotshal & Manges LLP is acting as legal advisor to WTW for this transaction.
WTW (NASDAQ: WTW) ha annunciato un accordo per vendere la sua attività di distribuzione di assicurazioni diretta al consumatore TRANZACT a GTCR e Recognize per $632,4 milioni, soggetto a regolazioni. Questa dismissione ha lo scopo di affinare il focus strategico di WTW sulle offerte business-to-business e business-to-consumer, semplificare il suo portafoglio e accelerare il progresso verso obiettivi a lungo termine di margine di flusso di cassa libero.
Si prevede che la transazione si chiuda entro la fine del 2024, in attesa di approvazioni normative e condizioni di chiusura abituali. WTW prevede di registrare perdite non monetarie ante imposte e relative svalutazioni stimate tra $1,6 miliardi e $2,1 miliardi nel terzo trimestre del 2024, con aggiornamenti fino alla data di chiusura. BofA Securities e Lazard fungono da consulenti finanziari, mentre Weil, Gotshal & Manges LLP agisce come consulente legale di WTW per questa transazione.
WTW (NASDAQ: WTW) ha anunciado un acuerdo para vender su negocio de distribución de seguros directo al consumidor TRANZACT a GTCR y Recognize por $632,4 millones, sujeto a ajustes. Esta desinversión tiene como objetivo agudizar el enfoque estratégico de WTW en las ofertas business-to-business y business-to-business-to-consumer, simplificando su cartera y acelerando el progreso hacia los objetivos de margen de flujo de efectivo libre a largo plazo.
Se espera que la transacción se cierre a finales de 2024, a la espera de aprobaciones regulatorias y condiciones de cierre habituales. WTW anticipa registrar pérdidas antes de impuestos no monetarias y cargos por deterioro relacionados, estimados entre $1,6 mil millones y $2,1 mil millones en el tercer trimestre de 2024, con actualizaciones hasta la fecha de cierre. BofA Securities y Lazard están actuando como asesores financieros, mientras que Weil, Gotshal & Manges LLP actúa como asesor legal de WTW para esta transacción.
WTW (NASDAQ: WTW)는 TRANZACT 소비자 직접 보험 배급 사업을 GTCR 및 Recognize에 $632.4 백만에 매각하기로 합의했다고 발표했습니다. 이번 매각은 WTW의 전략적 초점을 핵심 비즈니스-투-비즈니스 및 비즈니스-투-비즈니스-투-소비자 제공에 맞추고, 포트폴리오를 단순화하며, 장기적인 자유 현금 흐름 마진 목표로의 진행을 가속화하는 것을 목표로 합니다.
이 거래는 규제 승인이 이루어지고 관례적 종료 조건이 충족되면 2024년 말까지 종료될 것으로 예상됩니다. WTW는 2024년 3분기 동안 $1.6억에서 $2.1억 사이의 비현금 세전 손실 및 관련 자산 손상 차손을 기록할 것으로 예상하며, 종료 날짜까지 업데이트가 있을 예정입니다. BofA Securities와 Lazard가 재정 고문 역할을 하고 있으며, Weil, Gotshal & Manges LLP가 이 거래에 대해 WTW의 법률 고문 역할을 하고 있습니다.
WTW (NASDAQ: WTW) a annoncé un accord pour vendre son activité de distribution d'assurance directe aux consommateurs TRANZACT à GTCR et Recognize pour $632,4 millions, sous réserve d'ajustements. Cette cession vise à affiner le focus stratégique de WTW sur les offres professionnelles à professionnelles et professionnelles à professionnelles à consommateurs, à simplifier son portefeuille et à accélérer le progrès vers des objectifs à long terme de marge de flux de trésorerie libre.
La transaction devrait être conclue d'ici la fin de 2024, sous réserve des approbations réglementaires et des conditions de clôture habituelles. WTW prévoit d'enregistrer des pertes non monétaires avant impôts et des charges de dépréciation associées estimées entre $1,6 milliard et $2,1 milliards au troisième trimestre de 2024, avec des mises à jour jusqu'à la date de clôture. BofA Securities et Lazard agissent en tant que conseillers financiers, tandis que Weil, Gotshal & Manges LLP agit en tant que conseiller juridique de WTW pour cette transaction.
WTW (NASDAQ: WTW) hat eine Vereinbarung bekannt gegeben, um sein TRANZACT Direktvertriebsgeschäft für Versicherungen an Verbraucher an GTCR und Recognize für $632,4 Millionen zu verkaufen, vorbehaltlich von Anpassungen. Die Abspaltung zielt darauf ab, den strategischen Fokus von WTW auf zentrale Business-to-Business- und Business-to-Business-to-Consumer-Angebote zu schärfen, das Portfolio zu vereinfachen und den Fortschritt in Richtung langfristiger Ziele für freie Cashflow-Margen zu beschleunigen.
Die Transaktion soll bis Ende 2024, vorbehaltlich regulatorischer Genehmigungen und üblicher Abschlussbedingungen, abgeschlossen sein. WTW erwartet, im dritten Quartal 2024 nicht zahlungswirksame Steuervorverluste und damit verbundene Wertminderungen zwischen $1,6 Milliarden und $2,1 Milliarden zu verbuchen, mit Updates bis zum Abschlussdatum. BofA Securities und Lazard fungieren als Finanzberater, während Weil, Gotshal & Manges LLP als rechtlicher Berater von WTW für diese Transaktion tätig ist.
- Sale of TRANZACT for $632.4 million, potentially improving WTW's financial position
- Sharpens strategic focus on core business-to-business and business-to-business-to-consumer offerings
- Expected acceleration of progress toward long-term free cash flow margin goals
- Anticipated non-cash pre-tax losses and impairment charges between $1.6 billion and $2.1 billion
- Exit from the direct-to-consumer market, potentially limiting future growth opportunities in this sector
Insights
The sale of TRANZACT for
Key points to consider:
- The transaction is expected to accelerate WTW's progress towards long-term free cash flow margin goals, potentially improving financial flexibility.
- However, the anticipated non-cash pre-tax losses and impairment charges of
$1.6 billion to$2.1 billion in Q3 2024 will significantly impact the company's financial statements. - The sale price seems relatively low compared to the expected losses, suggesting TRANZACT's value has decreased or it wasn't performing as expected within WTW's portfolio.
For investors, this move could be seen as a double-edged sword. While it may improve long-term financial health and strategic focus, the short-term financial hit is substantial. The market's reaction will likely depend on how effectively WTW communicates its long-term vision and the expected benefits of this streamlined approach.
This divestiture represents a significant shift in WTW's market strategy, moving away from the direct-to-consumer insurance distribution space. Here's what this means for the company's market position:
- By exiting the D2C market, WTW is doubling down on its core competencies in B2B and B2B2C sectors, potentially strengthening its competitive advantage in these areas.
- The simplification of WTW's portfolio could lead to improved operational efficiency and clearer market messaging.
- However, this move also means WTW is forfeiting potential growth in the expanding D2C insurance market, which could be seen as a missed opportunity.
The transaction's impact on WTW's market cap (
- Divestiture sharpens strategic focus, simplifies portfolio and expects to accelerate free cash flow margin expansion
- Transaction expected to be completed by the end of 2024
LONDON, Oct. 01, 2024 (GLOBE NEWSWIRE) -- WTW (NASDAQ: WTW) (the “Company”), a leading global advisory, broking and solutions company, announced today that it has entered into a definitive agreement to sell its TRANZACT direct-to-consumer insurance distribution business to GTCR, a leading private equity firm, and Recognize, a technology services investment platform, for
“This divestiture sharpens our strategic focus on our core business-to-business and business-to-business-to-consumer offerings and simplifies our portfolio,” said Carl Hess, WTW’s Chief Executive Officer. “With the sale of TRANZACT, we are exiting this direct-to-consumer market and accelerating our progress toward our long-term free cash flow margin goals. Under the ownership of GTCR and Recognize, we are confident TRANZACT will continue to flourish and deliver the exceptional consumer experience that has enabled its consistent performance.”
The sale is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions. WTW anticipates the transaction will result in non-cash pre-tax losses and related impairment charges estimated to be between
Advisors
BofA Securities and Lazard are serving as financial advisors to WTW in connection with the transaction. Weil, Gotshal & Manges LLP is serving as WTW’s legal advisor.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
Learn more at wtwco.com.
WTW Forward-Looking Statements
This document contains ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. You can identify these statements and other forward-looking statements in this document by words such as “may”, “will”, “would”, “expect”, “anticipate”, “believe”, “estimate”, “plan”, “intend”, “continue”, or similar words, expressions or the negative of such terms or other comparable terminology. These statements include, but are not limited to, the held-for-sale accounting treatment and the expected loss impairment charges in connection with the sale of the TRANZACT Business, the anticipated timing for the closing of the Transaction and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.
There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained herein, including, but not limited to, the following: the ability to consummate the Transaction; the ability to obtain requisite regulatory approvals and the satisfaction of other conditions to the consummation of the Transaction on the proposed terms and schedule; the potential impact of the announcement or consummation of the Transaction on the Company; changes in general economic, business and political conditions, including changes in the financial markets; significant competition in the marketplace; and compliance with extensive government regulation. Factors also include those described under “Risk Factors” in the Company’s most recent 10-K filing and subsequent filings filed with the SEC.
Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.
Our forward-looking statements speak only as of the date made, and we will not update these forward-looking statements unless the securities laws require us to do so. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.
Contacts
INVESTORS
Claudia De La Hoz | Claudia.Delahoz@wtwco.com
MEDIA
Miles Russell: | miles.russell@wtwco.com
FAQ
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