Aon in talks to sell wealth unit to Madison Dearborn: FT

Aon in talks to sell wealth unit to Madison Dearborn: FT

Insurance broker Aon is nearing a sale of its Non-Financial Services (NFP) wealth business to Madison Dearborn for nearly $3 billion, just a year after acquiring it from the private equity group as part of a broader deal. The transaction, which could be announced this week, is part of Aon's strategy to fund new investments in artificial intelligence and its core insurance, human resources advisory, and health brokerage operations [1].

Aon acquired NFP, an insurance brokerage and wealth manager, from Madison Dearborn for $13 billion in April 2024. The deal included more than 300 acquisitions that transformed NFP into an industry colossus. Now, Aon is looking to shed non-core assets to refocus on its core businesses. The negotiations for the sale of the NFP wealth businesses are in late stages, although there is still a possibility that the deal could fall apart [1].

Madison Dearborn would pay approximately $2.7 billion for the NFP wealth businesses, which include private wealth groups Wealthspire Advisors, Fiducient Advisors, and Newport Private Wealth. These groups collectively manage about $60 billion in client assets and have advisory mandates on another $500 billion, accounting for about a fifth of NFP’s overall profits [1].

Under the prospective deal, Madison Dearborn would fund its acquisition with nearly $1.5 billion in equity and an additional $1 billion in debt, led by Goldman Sachs and UBS. This deal marks Madison Dearborn’s largest investment since a leadership shake-up at the company last year. The shake-up led to a refocus on healthcare, financial services, and government services, where Madison Dearborn has historically earned strong returns [1].

The sale process was competitive, with larger rivals such as CVC, KKR, and Stone Point Capital also vying for the NFP wealth businesses. Madison Dearborn ultimately prevailed in the narrow sale process, beating out these larger rivals [1].

Aon would retain its legacy wealth consulting business, which advises large institutions on investment allocations. This sale is expected to help Aon strengthen its core businesses and invest in growth opportunities [1].

References:
[1] https://www.ft.com/content/7b7e5882-6ee5-416d-a75b-96f555afb374