Towers, Perrin, Forster & Crosby, Inc. and Watson Wyatt Worldwide, Inc. (NYSE, NASDAQ: WW) today announced that their respective Boards of Directors have unanimously approved a definitive agreement under which Towers Perrin and Watson Wyatt will combine in a merger of equals to form a new, publicly listed company called Towers Watson & Co. Based on the closing price of Watson Wyatt common stock on June 26, 2009, the implied equity value of the transaction is approximately $3.5 billion. Watson Wyatt Chief Executive Officer John Haley will serve the combined company as Chief Executive Officer; Towers Perrin Chief Executive Officer Mark Mactas will serve as President.
“The combination of Towers Perrin and Watson Wyatt into Towers Watson will [private]create one of the world’s leading professional services firms, well positioned for sustained growth and profitability across all geographies and business segments,” said Mr. Haley. “The combination will further strengthen our core service lines while offering our clients an enhanced portfolio of proven offerings across a range of financial, risk and people management areas. Towers Watson will have tremendous global reach and service breadth to meet the growing needs of the world’s largest multinational corporations. As we provide more value for our clients, we in turn create value for our people and our shareholders.”
Mark Mactas, Chief Executive Officer of Towers Perrin, said, “This is an important transaction for our respective organizations that positions us well for a future of accelerated growth and higher levels of profitability. The fit between our firms is excellent, starting with a deep commitment to client service and shared values of integrity, professionalism and respect. Our service lines and geographic strengths are also highly complementary, which creates great opportunities for growth. We couldn’t be more excited about this combination, which will change the landscape of our industry.”
Towers Watson, which is expected to have annual revenues in excess of $3 billion, will benefit from the scale of the combined companies and anticipates approximately $80 million in pretax annual synergies. While significant savings are expected during the first two years following completion of the transaction, it is anticipated that full realization of synergies will take three years and cost approximately $80 million. Towers Watson will also have significant non-cash expenses during the first two years following completion of the transaction. The transaction is expected to be accretive to diluted earnings per share within three years following the consummation of the transaction.
Strategic & Financial Benefits of the Transaction
* Strengthened Organizational Capabilities: Towers Watson will be stronger than the sum of its parts, positioned for industry leadership long into the future and a more effective competitor that can provide additional services to our existing and prospective clients.
* Expanded Global Presence with Geographically Diverse Revenue Base: The combination will expand our global footprint to optimize service, global reach, and seamless delivery for our clients. Towers Watson will operate within four geographic regions: North America, EMEA (Europe, Middle East and Africa), Asia-Pacific, and Latin America.
* Enhanced Products and Services: Towers Watson will focus its operations on three segments: Benefits, Talent and Rewards, and Risk and Financial Services. These will build on existing thought leadership and research, and will be supported by a more comprehensive set of services, from strategic advice to solutions and implementation.
We believe that these benefits will lead to:
* Increased Growth and Revenue: For our shareholders, we expect to deliver economies of scale, diversification of our current businesses, and increased growth and investment potential.
* Greater Depth of Talent for Our Clients: We expect to provide broader solutions and a deeper talent pool across a wider geographic footprint.
* Greater Opportunities for Our People: For our people, there will be an expanded set of career opportunities, a stronger brand, greater access to resources, and a broader network of colleagues.
* Increased Profitability through Operating Synergies: Towers Watson expects to have an annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin of 17%+ post-integration. We expect $80 million potential cost synergies on a year three run rate, with $80 million in expected one-time costs.
Transaction Terms
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.
Towers Perrin shareholders, who are all active employees of Towers Perrin, plus a group of Towers Perrin employees to be designated to receive certain equity incentive awards, will be entitled to receive fifty percent of the combined company’s shares on a fully diluted basis. Towers Watson shares issued to Towers Perrin shareholders will be restricted shares that become freely tradable over a period of one to four years.
Conference Call
The companies will host a live webcast and conference call on Monday, June 29, 2009 beginning at 8:30 a.m. Eastern Time to discuss the transaction. The webcast can be accessed via the Internet by going to the Investor Relations section of www.watsonwyatt.com. A replay will be available after the live call and may be accessed via either company’s website at www.towersperrin.com or www.watsonwyatt.com.
Approvals and Time to Close
The transaction is subject to approval by each company’s shareholders and the satisfaction of customary closing conditions and regulatory review and approvals, including competition reviews in the U.S. and other countries. Subject to satisfaction of these conditions, the companies anticipate a shareholder vote in the fourth quarter of 2009 and a closing date as soon as possible thereafter.
Advisors
Goldman, Sachs & Co. is acting as financial advisor and Milbank, Tweed, Hadley & McCloy LLP is acting as legal advisor to Towers Perrin. Banc of America Merrill Lynch Securities is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to Watson Wyatt.[/private]
About Towers Perrin
Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. The firm provides innovative solutions in the areas of human capital strategy, program design and management, and in the areas of risk and capital management, insurance and reinsurance intermediary services, and actuarial consulting. Towers Perrin has 6,300 employees located in 26 countries and is located on the Web at www.towersperrin.com.
About Watson Wyatt
Watson Wyatt (NYSE, NASDAQ: WW) is the trusted business partner to the world’s leading organizations on people and financial issues. The firm’s global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,700 associates in 34 countries and is located on the Web at www.watsonwyatt.com.
Premier Foods announces that Paul Thomas, Group Finance Director, intends to step down from the Group later in the year. Paul will present the interim results on 5 August 2009 and will step down shortly thereafter. The Board has commenced a search for his successor.
Paul Thomas joined Premier Foods in June 2002 [private]and served on the Board as an executive director since that time.
Paul Thomas said:
“After seven enjoyable and very busy years with Premier Foods – during which time the Group floated on the London Stock Exchange and, through a series of strategic acquisitions, transformed itself into the UK’s largest branded food supplier – I feel it is time to seek new challenges. Following the successful capital restructuring and equity issue in March of this year, Premier Foods is in a strong position and has a great future ahead of it.”
Robert Schofield, Chief Executive Officer of Premier Foods, said:
“I would like to thank Paul for his significant contribution to the Group. He joined Premier Foods when it was still a private company and was instrumental in our successful initial public offering and in the extensive development of the Group since then. He leaves with our best wishes for the future.”[/private]
The OECD’s Centre for Tax Policy and Administration is pleased to announce the appointment of Mr Stephen Matthews as the Chief Tax Economist/Head of the Tax Policy and Statistics division, as of 4th May 2009. Mr Matthews,[private] a UK national, has over 20 years experience in the area of tax and fiscal policy, having held senior positions in the UK Treasury and H.M. Revenue and Customs. His most recent position was Head of Tax Analysis and Research at HMRC. He is familiar with the OECD as this was one of his responsibilities in the UK.
Mr Matthews also brings with him extensive experience in leadership and management, having managed the business unit of some 120 economists, statisticians and researchers that provides a joint analytical service for Treasury and HMRC on tax policy development and implementation, including work on developing and using models for estimating the revenue costs of tax measures, and for analyzing behavioural and distributional effects of tax policy options; quantifying impacts on taxpayer compliance and compliance costs; evaluation and other research on the impact of tax policy interventions; and preparing and publishing tax statistics.[/private]
[private]McCarter & English announced today that Kenneth Yoon has joined the firm as a partner in the Tax & Benefits practice group in the New York office. Mr. Yoon focuses his practice on the tax aspects of mergers and acquisitions, international transactions, securities offerings, investment funds, bankruptcy, and executive compensation. He also represents technology and emerging companies in such matters as strategic planning, employment and software development agreements and mergers and acquisitions.
“We are very pleased that Ken has joined the firm,” said Stephen M. Fields, the head of the New York office of McCarter & English. “The combination of his experience in the tax and technology fields will be a real asset to both our firm and clients as we continue the expansion of our New York office.” Mr. Yoon comes to McCarter & English from Arent Fox LLP.
Mr. Yoon serves on the Board of Directors of the Asian American Bar Association of New York and the International Tax Institute. He has lectured on taxation and e-commerce at New York University, the China Institute, the New York Software Industry Association and other groups.
Prior to becoming an attorney, Mr. Yoon had years of experience as a software designer and programmer, a systems analyst and a technology consultant. He earned his Juris Doctorate from Columbia University School of Law, his LL.M. in Taxation from New York University School of Law and his Bachelor’s Degree in Economics cum laude from Harvard University
McCarter & English, established more than 160 years ago, represents Fortune 500 and middle-market companies in their national, regional and local litigation and on important transactions. Its 400 attorneys are based in offices in Boston, Hartford, New York, Newark, Philadelphia, Stamford and Wilmington. [/private]
According to an article in Reuters today, the business formerly known as Fortis Intertrust is receiving multiple offers from private equity firms.
The FT has reported that the price offered is in the region of EUR 350 million
To read the original article please click here
In the UK the Fortis Intertrust business was subject to an MBO and is now trading as Verfides.
[private]Greg Rosser has joined Grant Thornton LLP as an executive director and the national leader of the firm’s Sales and Use Tax Automation practice. He will be based out of the firm’s Houston office.
As the national practice leader for Sales and Use Tax Automation, Rosser will coordinate the practice’s activities across Grant Thornton’s five regions. Grant Thornton’s Sales and Use Tax Automation group can assist companies with an evaluation and enhancement of current processes and tools, project management, sales tax research and technical resources, development and enhancement of internal controls, and training and documentation for new processes and systems.
“Grant Thornton’s clients expect tangible results from our services,” noted Brian Murphy, managing partner of the firm’s State and Local Tax practice. “In the sales and use tax area, Greg will help our clients and engagement teams strengthen and automate tax processes, leading to lower compliance costs and greater accuracy. Our experienced team of sales and use tax professionals coupled with Greg’s knowledge of tax software and his ability to create customized tools and solutions is what distinguishes our practice.”
Rosser has 20 years of experience in various accounting and information technology functions, including 15 years in state and local tax process automation covering sales and use, property and excise tax. He worked at Shell Oil Company until 1995 when his career turned to public accounting. Rosser has integrated third-party tax engines with various financial systems, has developed system interfaces, and has experience in transaction tax organization diagnostics and analysis. He has developed numerous custom tax applications, including captive procurement company management systems. In addition, Rosser has more than 15 years of experience with automating and managing state and local transaction tax compliance.
Rosser holds a Bachelor of Science degree in accounting from Louisiana Tech University. He is a member of the Association for Computers and Taxation and the Institute for Professionals in Taxation.
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Bingham has strengthened its tax resources in Europe with the addition of Stuart Sinclair as a London-based partner in the Tax and Employee Benefits Practice Group.
Sinclair, who joins Bingham from[private] the London office of McDermott Will & Emery, advises clients on all aspects of direct and indirect U.K. tax, focusing on domestic and cross-border corporate tax matters. He has particular experience in the financial services industry.
“Stuart’s skills and experience allow us not only to meet the needs of our London-based clients, but also to enhance our capability to handle international tax structuring and planning in cross-border transactions for our wider international client base,” said London managing partner James Roome. “He is a welcome addition to our team.”
Sinclair represents clients in various industries, including banking, funds, insurance, pharmaceuticals, manufacturing, retail and energy. He advises on all aspects of corporate tax, focusing on restructuring and group reorganizations, structured finance, mergers and acquisitions, financial instruments, and international and cross-border corporate tax planning.
Bingham’s global platform and financial services, restructuring and corporate strengths were key attractions for Sinclair.
“Bingham is well known in the cross-border restructuring and M&A sectors and for its work in advising financial institutions,” Sinclair said. “The firm’s commitment to a diversified global platform makes it a perfect fit for the international tax services I can provide to clients.”
Sinclair has acted for several Fortune 500 companies on debt restructurings and reorganizations of U.K. and European sub-groups. Recent representations also include advising a U.K. bank on a $6 billion combined synthetic and cash securitization of an equity portfolio, acting for the shareholder on the restructuring of a U.K. and German automotive group, advising on the reorganization of a London-based fund manager, and representing sellers and purchasers on various M&A transactions.[/private]
eTaxJobs has set up a new group on LinkedIn for tax & treasury professionals who want to chat about the tax market.
To join the group click here
