WTW will sell direct-to-consumer sales unit Tranzact for $632 million

Global insurance broker WTW has agreed to sell its direct-to-consumer insurance distribution business, Tranzact, to private equity firm GTCR and Recognize, a technology services investment platform, for $632.4 million.

“With the sale of Tranzact, we are exiting this direct-to-consumer market and accelerating our progress toward our long-term free cash margin goals,” said Carl Hess, chief executive of WTW, in announcing the sale.

Hess said the transaction sharpens WTW’s strategic focus on its core business-to-business and business-to-business-to-consumer offerings and simplifies its portfolio.

WTW bought Tranzact in July 2019 for $1.3 billion from investment firm Clayton, Dubilier & Rice.

Andy Nelson, president of Tranzact, and the existing management team will continue to lead the business and work with GTCR and Recognize.

Headquartered in Fort Lee, New Jersey, Tranzact provides direct-to-consumer marketing, sales, service and technology capabilities for Medicare health and life insurance plans. The company says its platform is used by several large insurance partners and has sold more than one million Medicare Advantage, Medicare Supplement and Life & Supplemental insurance policies.

London-based WTW said it expects the transaction to result in non-cash losses before tax and related impairment charges estimated to be between $1.6 billion and $2.1 billion, which will be recorded in the third quarter of 2024 and will be updated until closing. the date of the transaction.

Nelson has been a senior Tranzact executive since 2003 and president since 2016. GTCR said it has a long-standing relationship with Nelson. Recognize’s management team was part of a group that previously invested in Tranzact before it was sold to WTW in 2019 and worked closely with Nelson during that time.

The sale is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions.

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