WTW to 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 the 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 flow margin goals,” said Carl Hess, WTW chief executive officer, 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 partner with GTCR and Recognize.

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

London-based WTW said it anticipates the transaction will result in non-cash pre-tax losses 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 the closing date of the transaction.

Nelson has been a senior executive with Tranzact since 2003 and president since 2016. GTCR said it has a longstanding relationship with Nelson. The Recognize leadership team was part of a group that had previously invested in Tranzact before it was sold to WTW in 2019 and worked with Nelson closely during that time.

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