Aon sells HR outsourcing business to Blackstone for $4.8bn

Aon has sold its HR outsourcing business to private equity group Blackstone for $4.8bn in a deal that partially unwinds its 2010 acquisition of Hewitt & Associates.

Insurance broker Aon has shifted its business mix to focus on higher value advisory work in recent years. The business it has sold administers employee benefits programmes and other HR work. It made adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of $487m last year, giving the disposal an ebitda multiple of just under 10 times.

It bought the HR operation as part of the $4.9bn Hewitt acquisition of 2010, although since then much of Hewitt’s advisory business has been integrated into other parts of Aon.

Aon said that it would use the proceeds for a mixture of acquisitions and share buybacks.

Greg Case, Aon chief executive, said:

This transaction reinforces Aon’s position as the leading, global professional services firm focused on risk, retirement and health.

The sale of our outsourcing platform creates incremental capital to strengthen growth in core operations, and accelerates the pursuit of inorganic growth opportunities that address emerging client needs, similar to recent acquisitions in cyber risk advisory and health brokerage solutions.