By Robb M. Stewart
Great-West Lifeco is buying actuarial and consulting firm Milliman's retirement plan and benefits administration business for $340 million, a move that will add about $130 billion in client assets and 1.5 million plan participants.
The Canadian financial services company said its Empower wealth management subsidiary reached a definitive agreement to buy the operations from Milliman to strengthen its ability to compete across a range of retirement products by bringing a defined-benefit platform in-house.
With the acquisition, Empower's workplace platform will expand to $2 trillion in client assets on a pro forma basis, with 21 million participants.
The buy is part of a strategy to chase opportunities that add scale, expand capabilities and generate attractive long-term returns, Great West President and Chief Executive David Harney said.
Seattle-based Milliman's retirement plan and benefits administration business generated about $120 million in revenue last year. Great West said the transaction is expected to deliver about $20 million in cost benefits within three years and boost base earnings in the first year.
Great West forecast integration costs tied to the deal would be roughly $50 million. It plans to finance the cost of the acquisition with existing cash resources, and said there will be no impact on a cash balance that retains flexibility for share buybacks and additional merger and acquisition opportunities.
Great West's brands include Empower, Canada Life and Irish Life.
Write to Robb M. Stewart at robb.stewart@wsj.com