WTW to sell TRANZACT
WTW has entered into a definitive agreement to sell its Medicare business TRANZACT to GTCR, a private equity firm, and Recognize, a technology services investment platform, for $632.4 million, subject to certain adjustments.
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 $1.6 billion and $2.1 billion, which will be recorded in the third quarter of 2024 and will be updated until the closing date of the transaction.
WTW acquired TRANZACT in 2019 in a $1.2 billion deal, with an additional potential earn-out of up to $200 million.
Andy Nelson, President of TRANZACT, will become CEO of the standalone business at closing, alongside the rest of the management team who will continue in their current roles.
“This divestiture sharpens our strategic focus on our core business-to-business and business-to-business-to-consumer offerings and simplifies our portfolio. 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.” – Carl Hess, WTW’s Chief Executive Officer.
“We are excited to partner with Recognize, Andy and the talented team at TRANZACT and continue to build on their innovative platform. We have known Andy for many years and have always admired TRANZACT and their truly unique, data-driven marketing model for the insurance industry. Over the years, TRANZACT has developed deep, trusted partnerships with some of the industry’s most recognized insurers and, along with its strong brand, has positioned itself well to continue to gain share as we look to expand and enhance its offering. Importantly, they have also established a reputation for exceptional service and quality to the end consumers.” – David Donnini , Managing Director and Head of Business & Consumer Services at GTCR.
“Today marks an important milestone in TRANZACT’s journey and we are excited about our future together with our new partners at GTCR and Recognize. Over the last two decades, the TRANZACT team has worked tirelessly to build a leading insurance marketplace platform, known for quality service and innovative solutions. We are confident that in becoming an independent company, we will be able to continue to meet the needs of our insurance carrier partners and the consumers and drive growth across our business. We are incredibly grateful for the team at WTW for their support of our strategy and their partnership over the past five years.” – Andy Nelson.
