Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  Shares  >  Nyse  >  Towers Watson & Co    TW   US8918941076

SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

Towers Watson & Co to buy largest private Medicare exchange

05/13/2012 | 07:10pm US/Eastern

(Reuters) - Towers Watson & Co (>> Towers Watson & Co), a New York-headquartered professional services company, said on Sunday it would buy Extend Health Inc, operator of the largest private Medicare exchange in the United States, to boost its health benefits offering for employers.

(Reuters) - Towers Watson & Co (>> Towers Watson & Co), a New York-headquartered professional services company, said on Sunday it would buy Extend Health Inc, operator of the largest private Medicare exchange in the United States, to boost its health benefits offering for employers.

Health insurance exchanges are in the spotlight as the Supreme Court reviews Barack Obama's signature healthcare law, whose provisions include the operation of subsidized, state-regulated health insurance markets in 2014.

By running a private Medicare exchange since 2006, through which consumers compare plans from different carriers side by side, Extend Health claims to have already helped over 130 companies, including Ford Motor Co (>> Ford Motor Company), General Motors Co (>> General Motors Company) and Caterpillar Inc (>> Caterpillar Inc.), save as much as $400 million annually in retiree health insurance costs.

Towers Watson said on Sunday it would pay $435 million, less net debt and certain transaction costs, for Extend Health and that it anticipated the acquisition to be dilutive to adjusted earnings per share by 2 percent or less in year one and then slightly accretive in year two.

"This is an important time for retiree health benefits. Both companies have a strong track record of helping employers develop strategies and create programs for employee and retiree benefits," Bryce Williams, CEO of Extend Health, said in a statement.

Under the deal, Williams is to lead a new business segment within Towers Watson dubbed "Exchange Solutions" that will inherit Extend Health's more than 30 Fortune 500 employers and over 200,000 retirees.

The transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in less than 60 days, Towers Watson said.

A Towers Watson study last year found that 54 percent of employers were either somewhat or very likely to reconsider their current employer-sponsored plan strategy for post-65 retirees by 2015 as costs increased.

Bank of America Merrill Lynch (>> Bank of America Corp) and Wickersham & Taft advised Towers Watson, while Morgan Stanley (>> Morgan Stanley) and Wilson Sonsini Goodrich & Rosati advised Extend Health on the deal.

(Reporting by Greg Roumeliotis in New York; Editing by Diane Craft)

By Greg Roumeliotis

React to this article
Latest news on TOWERS WATSON & CO
07/01 TOWERS WATSON : SHAREHOLDER ALERT: Faruqi & Faruqi, LLP Announces the Investigat..
07/01 TOWERS WATSON : SHAREHOLDER ALERT: Brower Piven Commences An Investigation Into ..
07/01 TOWERS WATSON : INVESTOR ALERT: Levi & Korsinsky, LLP Notifies Shareholders of T..
07/01 TOWERS WATSON : Insurers Make Progress on Using Risk Appetite to Build Links Wit..
07/01 TOWERS WATSON : Morgan & Morgan : Announces the Investigation of Towers Watson &..
07/01 TOWERS WATSON : Shareholder Alert: Bernstein Liebhard LLP Announces Investigatio..
07/01 TOWERS WATSON : Ryan & Maniskas, LLP : Investigation of Towers Watson & Co.
07/01DJWILLIS-TOWERS WATSON : A Merger of Equals--Not Exactly
07/01 WILLIS : in an $18bn Towers Watson merger
06/30 WILLIS : Chicago Tribune Phil Rosenthal column
Advertisement
Chart
Duration : Period :
Towers Watson & Co Technical Analysis Chart | TW | US8918941076 | 4-Traders
Income Statement Evolution
More Financials