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AON Buys Hewitt for $4.9 Billion

Not a lot of activity in the merger and acquisition arena as of late. But today a sizable deal was announced with the insurance broker AON to buy Hewitt Associates, which typically deals with human resources, in a 41 percent premium deal done at $50 per Hewitt share.

The deal is roughly $4.9 billion in cash and stock—it is valued at 7.5 times expected EBITDA this year—to increase AON's product portfolio.

Aon expects to generate $355 million in annual cost-savings by 2013 and $1.5 billion in value- creation on a discounted cash flow basis.

The deal is being financed by two investment banks: Credit Suisseand Morgan Stanley. AON has commitments for a 3-year, $1 billion bank term loan and a $1.5 billion bridge to unsecured notes.




For more on AON's acquisition of Hewitt, read David Faber's post:

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