TSX: GWO
-- Enhances Empower's workplace offering across defined contribution $(DC)$, defined benefit $(DB)$, and health & welfare (H&W) benefits administration -- Adds US$130 billion in client assets1 and 1.5 million plan participants to Empower at closing -- Transaction expected to generate a fully synergized IRR in the mid-teens and be accretive to base earnings in Year 1, supported by recurring fee-based revenues, cost efficiencies, and an enhanced go-to-market strategy
WINNIPEG, MB, June 29, 2026 /CNW/ - Great-West Lifeco Inc. (Great West or the Company) subsidiary Empower today announced that it has entered into a definitive agreement with Milliman, Inc. (Milliman) to acquire Milliman's retirement plan and benefits administration business. Subject to regulatory approvals and other customary closing conditions, Empower will acquire the business for total consideration of US$340 million.
Supported by a strong technology platform and deep domain expertise, the acquired business provides defined contribution (DC), defined benefit (DB), and health & welfare (H&W) administration services to corporate, public sector, trade labor union, multi-employer, and non-profit clients, with approximately US$130 billion in client assets across 1.5 million participants. The transaction represents a significant step forward in Empower's strategy to deliver an integrated workplace ecosystem, enhancing its ability to serve clients with broader and more comprehensive retirement and benefits solutions.
"The acquisition reflects our disciplined approach to capital deployment and our focus on strengthening high-quality, capital-efficient growth platforms," said David Harney, President and CEO, Great West. "It also aligns with our strategy of pursuing opportunities that add scale, expand and deepen capabilities, and generate attractive long-term returns, while leveraging the strong execution discipline and financial flexibility we have built across the organization."
Edmund F. Murphy III, CEO, Empower added, "This transaction significantly strengthens our ability to compete and win across the full spectrum of retirement solutions by bringing a leading defined benefit platform in-house. The business' strong reputation, high-quality client base, and scalable platform align closely with our long-term strategy. Together, we will unlock meaningful value through innovation, improved client outcomes, and expanded growth opportunities across defined contribution, defined benefits, and benefits administration."
Strategic Rationale
The transaction advances Empower's strategy by expanding its workplace solutions platform and enhancing its competitive positioning. Milliman's DB capabilities are a strong strategic fit, enabling revenue diversification, accelerating growth, and further differentiating Empower's workplace offering.
-- Adds approximately 1.5 million participants and US$130 billion in client
assets to Empower's workplace solutions platform, bringing it to 21
million participants and US$2.0 trillion in client assets on a pro-forma
basis2.
-- Provides Empower with a leading proprietary DB administration platform.
-- Positions Empower to compete more effectively for bundled DC/DB
opportunities, particularly in the large corporate plan segment, where
integrated offerings are particularly valued by sponsors.
-- Introduces a H&W benefits administration capability, enabling entry into
a large and growing market, while enhancing bundling opportunities for
the existing client base.
Overall, the acquisition strengthens Empower's ability to deliver end-to-end solutions, deepen client relationships, and enhance its integrated offering.
Financial Considerations
The retirement plan and benefits administration business of Milliman generated approximately US$120 million in revenue in 2025.
-- The transaction is expected to be accretive to base earnings in the first
year and is expected to generate an IRR in the mid-teens, with upside
from further growth opportunities.
-- The acquisition is expected to deliver approximately US$20 million of
cost synergies within three years, reflecting the primarily strategic
merits of the transaction, which include enhanced DB and new H&W
capabilities.
-- Total integration costs are expected to be approximately US$50 million,
including technology integration.
Transaction Details and Approvals
-- Empower intends to finance the total consideration for the transaction
with existing cash resources, with US$244 million payable upon closing
and the balance to be paid over five years.
-- There is no pro forma impact to Great West's holding company cash balance
of $2.1 billion and leverage ratio of 28% as at March 31, 2026. The
Company will retain significant financial flexibility post-transaction,
including for share repurchases in 2026 at a level similar to 2025 and
additional M&A opportunities.
-- The transaction is expected to close in the second half of 2026, subject
to customary closing conditions and regulatory approvals.
_______________________________
(1) This is a non-GAAP financial measure. Additional
information regarding this measure is incorporated
by reference from the "Non-GAAP Financial Measures
and Ratios" section of Great West's Q1 2026 Management's
Discussion and Analysis, available at www.sedarplus.ca.
(2) As of March 31, 2026
ABOUT GREAT WEST
Great West is a financial services holding company focused on building stronger, more financially secure futures. We operate in the United States, Canada and Europe under the brands Empower, Canada Life and Irish Life. Together we provide wealth, retirement, group benefits and insurance and risk solutions to our approximately 40 million customer relationships. As of March 31, 2026, Great West's total client assets were $3.3 trillion.
Great West trades on the Toronto Stock Exchange (TSX) under the ticker symbol GWO and is a member of the Power Corporation group of companies. To learn more, visit greatwestlifeco.com.
ABOUT EMPOWER
Recognized as a leader in retirement services and wealth management, Empower administers over US$2 trillion in assets for more than 20 million individuals through the provision of workplace and individual retirement plans, advice, financial planning, and investments. To learn more, visit empower.com
Cautionary note regarding Forward-Looking Information
From time to time, Great West makes written and/or oral forward-looking statements within the meaning of applicable securities laws, including in this release. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "achieve", "ambition", "anticipate", "believe", "could", "estimate", "expect", "initiatives", "intend", "may", "objective", "opportunity", "plan", "potential", "project", "target", "will" and other similar expressions or negative versions of those words. These include, without limitation, statements about: (a) the timing and completion of the proposed acquisition of Milliman's retirement plan and benefits administration business; (b) the expected costs and benefits of the proposed acquisition, including statements about the timing and cost of integration activities, the timing and extent of expected cost efficiencies and synergies, increased scale, capabilities and marketing of Empower, revenue diversification, value creation/realization and growth opportunities, product and service innovation, and improved client outcomes; (c) the impacts of the proposed acquisition on Great West's and Empower's financial condition and flexibility, including statements about the expected internal rate of return of the proposed acquisition and expected base earnings accretion resulting from the proposed acquisition; and (d) other statements about the businesses and financial condition of Great West (including expected share repurchases), Empower and the acquired business and the U.S. retirement and benefits industry generally.
Forward-looking statements are based on expectations, forecasts, estimates, predictions, projections and conclusions about future events that were current at the time of the statements and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally, including the U.S. retirement and benefits industry. This information has been provided to the reader to give an indication of Great West's current expectations concerning the impact of the proposed acquisition and these statements may not be suitable for other purposes. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements.
In particular, in calculating the expected IRR and accretive nature of the proposed acquisition, management has estimated retention of client assets, expense synergies, foregone earnings on surplus used to finance the acquisition and integration expenses. With respect to Great West's expected level of share repurchases, the amount and timing of actual repurchases will depend on the earnings, cash requirements and financial condition of Great West, market conditions, our ability to effect the repurchases on a prudent basis, capital requirements, applicable law and regulations (including applicable securities laws), and other factors deemed relevant by Great West, and may be subject to regulatory approval or conditions. Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance that they will prove to be correct.
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