Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Merger or Acquisition (June 2008)
40 slides from Willis Towers Watson Public's merger presentation, Jun 9, 2008
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Slide 5: Willis Group Holdings acquires Hilb Rogal & Hobbs
Willis Group Holdings acquires Hilb Rogal & Hobbs Transaction overview Willis and HRH overviews Pro forma combined company Financial summary Summary Appendix
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Slide 10: The acquisition of Hilb Rogal & Hobbs is strategically and financially compelling
The acquisition of Hilb Rogal & Hobbs is strategically and financially compelling Transaction rationale Accelerates growth and increases client value through larger, more diversified platform Complementary geographic footprint doubles Willis’ North American revenues More than doubles Willis’ revenue
Slide 11: Terms of transaction
Terms of transaction TRANSACTION Willis to acquire 100% of Hilb Rogal & Hobbs (HRH) PRICE PER SHARE 50% cash, 50% stock Tax free transaction to Hilb Rogal & Hobbs shareholders $1.7 billion equity value $2.1 billion enterprise value (2) EXPECTED CLOSING 4Q 2008 APPROVALS Customary regulatory approval
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Slide 16: Overview of Willis
COMPANY DESCRIPTION SENIOR MANAGEMENT ADJUSTED EBITDA AND EBITDA MARGIN (1) 2007 REVENUE BREAKDOWN • 3rd largest provider of insurance brokerage, reinsurance and risk management consulting services worldwide • Operates three business segments International (39%) – international retail brokerage Glob
Slide 17: Overview of Willis: services and revenue by product
280 300 320 340 360 380 400 • Employee benefits • Reinsurance • Property & casualty • Energy • Construction • Aerospace • Real estate Personal Lines 1% Commercial P&C 74% Reinsurance 15% Employee Benefits 10% 2007 REVENUE BY PRODUCT Overview of Willis CASH FLOW FROM OPERATIONS (1) ($ in millions) 20
Slide 18: Overview of HRH
$174 $181 $190 24% 27% 27% 2005 2006 2007 COMPANY DESCRIPTION SENIOR MANAGEMENT EBITDA AND EBITDA MARGIN 2007 REVENUE BREAKDOWN • Based in Glen Allen, Virginia • Offers P&C, employee benefits and specialized exposure insurance • U.S. middle market focused broker with national footprint Domestic Reta
Slide 19: Overview of HRH: services and revenue by product
0 100 • Personal lines • Employee benefits • Property & casualty • Construction • Healthcare • Real estate Personal Lines 6% Reinsurance 1% Employee Benefits 21% Wholesale 9% Commercial P&C 63% 2007 REVENUE BY PRODUCT Overview of HRH CASH FLOW FROM OPERATIONS (1) ($ in millions) 2007 Total Revenues:
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Slide 24: Strategic objectives
Strategic objectives Critical mass in key areas Opportunity for accelerated growth California, Florida, Texas, Illinois, New York, Boston, New Jersey, Philadelphia Leverage unique specialty expertise throughout our retail network Personal lines, energy, aerospace, real estate, health care, construct
Slide 25: Broker rankings
Broker rankings Source: Business Insurance Annual Insurance Broker Survey, July 2007, Revenues generated by U.S. clients Source: Company reports 2006 Brokerage 2007 Brokerage Rank Company Revenues Rank Company Revenues Marsh & McLennan $5,342 Marsh & McLennan $11,350 Aon 2,751 Aon 7,471 Pro forma Wi
Slide 26: Complementary geographic fit
Complementary geographic fit London, England International Presence WSH HRH Overlap Willis HRH # of Offices Key Growth Areas
Slide 27: Pro forma combined total revenues by business mix
WILLIS Pro forma combined total revenues by business mix Employee Benefits 10% Personal lines 1% WillisRe 15% Commercial P&C 74% Personal Lines 2% Wholesale 2% Reinsurance 12% Employee Benefits 13% Commercial P&C 71% HRH PRO FORMA 2007 Total Revenues: $2,578 million 65% Commissions / 35% Fees 2007 T
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Slide 32: Financial structure
Financial structure TRANSACTION Willis to acquire 100% of Hilb Rogal & Hobbs (HRH) PRICE PER SHARE 50% cash, 50% stock Tax free transaction to Hilb Rogal & Hobbs shareholders $1.7 billion equity value $2.1 billion enterprise value APPROVALS Customary regulatory approvals and HRH shareholder vote $46
Slide 33: Repurchase assumptions
REPURCHASE ASSUMPTIONS 2.4x 2008E revenue Less than 10x Hilb Rogal & Hobbs estimated 2008E EBITDA Cash EPS accretive by 7% 2009, 10% 2010, 14% 2011 GAAP EPS dilutive by (3)% 2009; accretive by 2% 2010, 6% 2011 Assumed $100 million in annual cost savings 50% in 2009, 100% thereafter 8% of pro forma c
Slide 34: Pro forma combined financial goals
Pro forma combined financial goals $2.25 $4.05- $4.15 $3.15- $3.25 $2.85- $2.95 $2.77 2006 2007 2008E 2009E 2010E Revised targets to 24% in 2009 and 27% in 2010 Excluding transaction amortization margins estimated at 25% and 29%, respectively, in 2009 and 2010 Revised target for 2009 at $3.15- $3.25
Slide 35: Summary
Summary Will accelerate growth and increase client value through larger, more diversified platform Complementary geographic footprint doubles Willis’ North American revenues More than doubles Willis’ revenues in targeted North America Employee Benefits business Adds depth and breadth to other key pr
Slide 36: Appendix
Appendix
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