US - Hewitt Associates will acquire US consulting firm EnnisKnupp, a move Hewitt said sweetened its merger deal with Aon Consulting announced less than two weeks ago.
The new combined firm will have US$3trn in global assets under advisory and will help Hewitt expand its investment consulting business in the US and move forward with its global growth plans. EnnisKnupp is contributing two-thirds of those assets.
Hewitt North American retirement solutions leader Ari Jacobs told Global Pensions officials at Hewitt were particularly attracted to EnnisKnupp's capabilities in alternative assets investment advice and their fiduciary services business.
Hewitt chairman and chief executive Russ Fradin said in a release: "EnnisKnupp's highly regarded advisory capabilities and impressive client portfolio are a perfect complement to Hewitt's well-respected actuarial business and extensive expertise in managing pension risk."
He added: "Our commitment to be a top-tier global investment consulting player and the potential to combine forces with EnnisKnupp were also real positives for Aon in our proposed transaction." The deal is scheduled to close by the end of September.
Earlier this month, Hewitt announced a $4.9bn merger agreement with Aon Consulting. Aon valued Hewitt at $50 per share, with the $4.9bn deal consisting of 50% cash and 50% Aon stock. The deal is expected to deliver $355m of cost savings per year. (Global Pensions; July 13, 2010)
Jacobs said officials at the firm did not want to allow the Aon deal to derail its EnnisKnupp acquisition. "We're in a business as usual mindset," he said.
Jacobs said officials continue to look for potential partners as part of its global growth plans, but declined to be more specific.
EnnisKnupp president and chief executive Steve Cummings will lead the Hewitt EnnisKnupp business. He will report to Mary Moreland, Hewitt's North American Retirement and Investment Consulting Leader. Bradley Smith, current leader of Hewitt Investment Group; Russ Ivinjack and Steve Voss, principals at EnnisKnupp will all form part of a US leadership team. Ian Peart, currently head of global manager research at Hewitt, will lead global manager research at the combined firm. Cummings could not immediately be reached for comment.
Jacobs said there are currently no plans for large-scale staff reduction and that no client-facing staff will be made redundant, but there may be a small reduction in support staff.
Terms of the deal were not disclosed.
The Hewitt-Ennis deal solidifies a consolidation trend among consultants seen over the past year. In January, the merger of Towers Perrin and Watson Wyatt formed consulting firm Tower Watson. The $4bn deal was originally announced in June 2009. (Global Pensions; January 4, 2010)
Meanwhile, in March 2009, Mercer and US-firm Callan Associates caused a stir in the investment community when it pulled out of a merger agreement announced the previous month without explanation. (Global Pensions; March 30, 2009)
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