Dec 10 (Reuters) - Insurance broker WTW said on Wednesday it will acquire Newfront in a deal worth up to $1.3 billion, aiming to expand its reach in the U.S. middle-market through the brokerage.
The deal will be through a $1.05 billion upfront payment that includes about $900 million in cash and $150 million in equity, with an additional contingent payout of up to $250 million, mainly in equity.
Newfront's acquisition will broaden WTW's U.S. middle-market footprint and add scale in sectors such as
technology, fintech and life sciences, the company said.
"This combination 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," said Carl Hess, CEO of WTW.
Newfront, backed by names such as Goldman Sachs and Index Ventures positions itself as a "modern insurance brokerage for the 21st century", aiming to blend insurance expertise with technology.
The San Francisco-based company, founded in 2017, raised $200 million in a funding round in April 2022, valuing the firm at $2.2 billion where new investors included Doordash CEO Tony Xu and investment firm Vetamer.
The move for Newfront bodes well for established players such as WTW, which are seeking to boost digital capabilities and expand in niche markets. WTW has also been expanding its global presence, securing new client wins in the Middle East, a key market for the company.
The deal, slated to close in the first quarter of 2026, will fold Newfront's Business Insurance and Total Rewards units into WTW's Risk & Broking and Health, Wealth & Career divisions, respectively.
Newfront's organic revenue rose at a 20% CAGR from 2018 to 2024, supported by a larger producer base, proprietary client tools and adoption of agentic artificial intelligence, the company said.
The deal terms include an additional $150 million, mainly in equity, payable if Newfront exceeds revenue growth targets.
(Reporting by Pritam Biswas in Bengaluru; Editing by Mrigank Dhaniwala and Shailesh Kuber)
