Watson Wyatt (WW) and Towers Perrin Announce Merger of Equals
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This weekend, Towers, Perrin, Forster & Crosby, Inc. and Watson Wyatt Worldwide, Inc. (NYSE: WW) announced a merger of equals to form a new, publicly listed company called Towers Watson & Co., with an implied equity value of the transaction of approximately $3.5 billion. The merger will create one of the world's largest employee-benefits consultancy.
Watson Wyatt CEO John Haley will serve the combined company as CEO and Towers Perrin CEO Mark Mactas will serve as President.
The companies see increased profitability through operating synergies. Towers Watson expects to have an annual EBITDAmargin of 17%+ post-integration. They expect $80 million potential cost synergies on a year three run rate, with $80 million in expected one-time costs.
Under the terms of the agreement, Watson Wyatt shareholders will be entitled to receive fifty percent of the combined company's shares on a fully diluted basis. Towers Watson shares issued to Watson Wyatt shareholders in the merger will be freely tradable.
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