Aon has signed a definitive agreement to acquire NFP, a middle market property and casualty broker, benefits consultant, wealth manager and retirement plan adviser, in a transaction valued at $13.4 billion at closing.
The purchase price will comprise $7 billion in cash and Aon stock valued at $6.4 billion, said a Dec. 20 release.
Aon will acquire NFP from funds affiliated with NFP's main capital sponsor, Madison Dearborn Partners, and also from funds affiliated with HPS Investment Partners.
Madison Dearborn Partners is a private equity investment firm based in Chicago. HPS Investment Partners is a global, credit-focused alternative investment firm with approximately $107 billion of assets under management.
The transaction is expected to close in mid-2024.
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 acquisition of NFP will expand Aon's presence in the "large and fast-growing middle market segment, with capabilities across risk, benefits, wealth and retirement plan advisory," the release noted.
"In the wake of the Aon-NFP deal, we expect to see continued M&A activity in 2024 focused on small to mid-sized business insurance organizations in North America and Europe," said Brad Ptasienski, insurance technology senior partner for consulting firm West Monroe. "This will be a continuation of how 2023 ended — very strong, with significant activity in the space."
This acquisition specifically makes a lot of sense, he added.
"It will allow Aon to leverage itself further into the middle market with NFP's deep expertise in benefits, wealth and retirement plan advisory, which has been rapidly growing," he said. "Insurance product demand has remained fairly strong despite an economic blip and private equity funds and other investors will seek to build in 'recession insulation' through these acquisitions."
