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<span class="articleLocation”>Insurance broker Aon Plc is in advanced
talks to sell its employee benefits outsourcing unit to buyout
firm Clayton Dubilier & Rice LLC for nearly $4.5 billion, people
familiar with the matter said on Thursday.
The divestiture would undo much of Aon’s 2010 acquisition of
human resources services provider Hewitt Associates Inc for $4.9
billion, signaling that the company now wants to focus more on
its insurance and risk management businesses.
After submitting an offer earlier this month, CD&R has
prevailed over private equity firm Blackstone Group LP in
an auction for the unit, the sources said. The sources cautioned
that negotiations were ongoing and that the outcome could still
CD&R operating partner and former SunGard Data Systems Inc
chief executive officer Russell Fradin, who was Aon Hewitt’s CEO
from 2006 to 2011, is playing a key role in drafting a plan on
how the unit can be separated from Aon, the sources said.
The unit for sale facilitates the processing of claims for
companies, including defined benefit, defined contribution, and
health and welfare administrative services.
Aon hopes to announce a deal by Feb. 10, when it plans to
report fourth-quarter earnings, the sources said.
The sources requested anonymity because the negotiations are
confidential. Aon and CD&R declined to comment, while Blackstone
did not immediately respond to a request for comment.
Headquartered in London, Aon is active in more than 120
Private equity firms have been prolific investors in
businesses that help companies cut costs by outsourcing large
parts of their administrative functions, since such operations
can generate strong cash flows. A few years after they invest,
they seek to sell ownership of those assets at a big profit.
In September, Canadian pension fund manager Caisse de dépôt
et placement du Québec said it would acquire a $500 million
minority stake in Sedgwick Claims Management Services Inc, which
specializes in workers’ compensation and is owned by buyout
firms KKR & Co LP and Stone Point Capital LLC.
In another example, Blackstone and Singaporean sovereign
wealth fund GIC invested $750 million in 2014 to obtain minority
stakes in Kronos Inc, a workforce management solutions company
controlled by buyout firm Hellman & Friedman LLC.
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