WTW said it has completed its sale of Tranzact to private equity firm GTCR and digital services investor Recognize.
Commenting on the sale, WTW CEO Carl Hess said the sale is a “meaningful milestone” in its efforts to focus on its core products and offerings.
“This divestiture demonstrates our commitment to optimizing our portfolio, further enabling us to accelerate performance and enhance efficiency to deliver substantial value over time,” Hess said.
The Tranzact deal was initially announced in October of last year. The company said it sold its direct-to-consumer insurance distribution business for $632.4 million, subject to certain adjustments.
During the announcement, Hess said that the sale would mark the company’s exit from the direct-to-consumer market and focus on its progress in achieving its 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,” Hess said.
WTW expected the transaction to result in non-cash pretax losses and related impairment charges of about $1.6 billion to $2.1 billion. BofA Securities and Lazard served as WTW’s financial advisers in connection with the deal, while Weil, Gotshal & Manges LLP served as its legal counsel.
During its 2024 Investor Day, WTW outlined its plan for value creation, including utilizing innovation to improve performance and expand its reach in attractive markets.
In line with this plan, the company said then that it will establish a joint venture with Bain Capital, where it will hold a minority stake, to re-enter the treaty reinsurance broking market.
WTW also integrated new artificial intelligence capabilities into its financial modelling and reporting software to help life and health insurers comply with changing regulatory standards.
Last year, the company also partnered with Kayna and Vibrant to support third-party vendor cybersecurity insurance compliance. It also acquired a stake in atomos, a UK-based advice-led wealth manager backed by funds managed by Oaktree Capital Management.
