Aon Corp (AON) PT Lowered to $398 at Mizuho

Mizuho analyst Yaron Kinar lowered the price target on Aon Corp (NYSE: AON) to $398.00 (from $437.00) while maintaining a Outperform rating.

The analyst comments "Today AON announced the $17bn all-cash acquisition of private-equity-sponsored USI, the 10th-largest insurance broker by revenues. 68% of USI's TTM $3bn of revenues are P&C and specialty brokerage-weighted, and 32% are employee benefits. USI is a middle-market-oriented broker, with direct E&S capabilities - two slices of the insurance market in which AON is under-represented. AON expects the acquisition to close in 4Q26, and be dilutive to FY27 but accretive to FY28. Net of tax attributes, the purchase price is $16.7bn, or 16.8x USI's TTM EBITDA and 5.6x TTM revenues. Accounting for buyer adjustments, acquisition-related costs, and near-term revenue dis-synergies, the deal amounts to 22.1x EBITDA. However, AON estimates the EBITDA multiple at 14.5x when also adjusting for an expected $395mn of planned revenue and cost synergies over the next three years. This compares to our current coverage average (ex NP) of 13.3x."

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