Aon to Buy Wealthspire Parent NFP for $13.4B

Filings with the Secuirities and Exchange Commission show that NFP’s retirement arm has about 2,075 ordinary individual clients, 890 high-net-worth individual clients and 2,197 institutional clients, with an average of about $287,000 in assets per ordinary individual client, $446,000 per high-net-worth client and $34 million per institutional client.

NFP Retirement has between 251 and 500 financial planning clients.

Wealthspire has 705 ordinary individual clients, 428 high-net-worth clients and 70 institutional clients, with an average of about $439,000 in assets per ordinary individual client, $2.7 million per high-net-worth client and $4.5 million per institutional client. It had $20.5 billion in assets under management as of Sept. 30.

The deal: The deal price includes $6.4 billion in Aon stock and $7 billion in cash. Aon plans to raise $5 billion for the deal in 2024 and provide the other $2 billion at closing, Christa Davies, Aon’s chief financial officer, said during the conference call.

Aon hopes to close on the deal by the end of 2024, but Davies said company performance projections include the possibility that the deal could close in mid-2025.

Insurance distributor deals can be tough to complete: Aon itself called off a merger with Willis in 2021, after U.S. antitrust regulators objected.

Fitch’s assessment: In September, analysts at Fitch Ratings assigned NFP a long-term issuer default rating of B, with a stable outlook.

Fitch noted that NFP is in a stable business but had a relatively high debt level for companies at its rating level, due in part to moves to invest excess cash in mergers and acquisitions and to use debt to help pay for them.

“If the company were to significantly slow M&A, Fitch believes cash flow generation would improve materially,” Fitch said.

Greg Case. Credit: Jeff Kowalsky/Bloomberg