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Blackstone to Buy Aon's Technology-enabled HR Business

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The Blackstone Group L.P.BX has inked a deal to acquire Aon plc's AON technology-enabled benefits and human resources ('HR') platform, for a cash consideration of up to $4.8 billion. The deal includes $4.3 billion at closing and further consideration of up to $500 million based on future performance.

The deal is subject to antitrust clearance and is anticipated to close by second-quarter 2017. Blackstone will run the business as a standalone company.

Blackstone stated in its release that the business, currently part of Aon Hewitt, is the largest benefits administration platform in the U.S., and a major services provider for cloud-based HR management systems.

Peter Wallace - a senior managing director at Blackstone - stated, "Blackstone sees tremendous opportunity for investing in leading businesses within the technology-enabled services sector, where we believe there is a significant opportunity to accelerate future growth. We look forward to working with the excellent management team to continue to invest in and grow the company."

Greg Case, president and chief executive officer of Aon said, "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." The UK based company anticipates the transaction to improve its return on invested capital and be accretive to adjusted EPS in 2018.

Credit Suisse Group AG CS , Citigroup Inc. C and SMB Capital are serving as financial advisors to Blackstone, while Morgan Stanley is serving as financial advisor to Aon.

Shares of Blackstone gained 20.1% over the past three months, significantly outpacing the 5.7% growth for the he Zacks categorized Investment Management industry. Last month, the company reported fourth-quarter 2016 economic net income of 68 cents per share, which surpassed the Zacks Consensus Estimate of 63 cents. Results were driven by increase in revenues. Also, growth in assets under management continued to be impressive. However, escalated expenses acted as a major headwind.

Blackstone currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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