Willis Towers Watson (WTW) has agreed to purchase the San Francisco, US-based broker Newfront for a total consideration of $1.3bn (£972.25m). 

The transaction aims to strengthen WTW’s position in the US middle market, with a particular focus on technology, fintech and life sciences sectors. 

Of the total consideration, $1.05bn will be paid up front, consisting of around $900m in cash and $150m in equity to be provided to Newfront employee-shareholders.  

There is also a possible contingent payment of up to $250m, mostly in equity, based on the achievement of specified performance goals by Newfront. 

A further sum, up to $150m and largely in equity, may become payable if revenue growth targets above the original projections are reached. 

The planned closing date is during the first quarter of 2026, contingent upon regulatory approvals and customary closing processes. 

Following completion of the acquisition, Newfront’s Business Insurance operations will join with WTW’s Risk & Broking (R&B) segment, while its Total Rewards business will integrate into WTW’s Health, Wealth & Career (HWC) segment.  

From 2018 to 2024, Newfront recorded a compound annual growth rate (CAGR) of 20% in organic revenue.

More than 120 insurance producers from Newfront are expected to join WTW as part of this integration. 

Newfront CEO and co-founder Spike Lipkin said: “Newfront is excited to join WTW and combine our technology-native approach to insurance broking with WTW’s global presence and established trading, analytics and broking platforms. 

“We will continue to serve our clients with the speed and intelligence they expect and will offer new capabilities enabled by WTW’s comprehensive portfolio of global solutions and products.” 

Newfront’s technology platform includes Navigator, a client-facing interface, and automation functions driven by AI for placement tasks.  

These features are expected to supplement WTW’s existing platforms including Neuron for digital trading, as well as risk modelling and data analytics capabilities.  

WTW CEO Carl Hess said: “We are delighted to welcome Newfront to the WTW team as we take an important step forward in executing on our strategy through a transaction that will drive value creation for our clients, colleagues and shareholders. 

“This combination strengthens our presence in the US middle market, accelerates our technology and specialty strategies, and enables the delivery of an integrated, end-to-end technology platform that will drive growth, enhance operational efficiency and better serve our clients.” 

As an employee retention measure, WTW will offer equity-based incentives worth $100m for qualifying Newfront staff through 2031.  

According to current estimates, the acquisition may reduce adjusted earnings per share (EPS) by around $0.10 in 2026 but is projected to become accretive to adjusted EPS by 2027. 

WTW recently made headlines with its move to acquire NatWest Group-owned workplace retirement schemes platform Cushon.