TSX-listed firm says transaction will be accretive to earnings in year one and generate mid-teens IRR
Winnipeg headquartered Great-West Lifeco's US retirement subsidiary Empower has agreed to pay US$340 million for the retirement plan and benefits administration business of Milliman, Inc., a deal the Winnipeg-based holding company says will broaden its workplace offering and strengthen returns across its North American platform.
Great West said it expects the transaction to generate a fully synergized internal rate of return in the mid-teens and to be accretive to base earnings from its first full year of operation.
The acquired business spans defined contribution, defined benefit and health and welfare administration services, with a client roster stretching across corporate employers, public sector bodies, trade labour unions, multi-employer plans and non-profit organizations.
At closing, Empower expects to bring on approximately 1.5 million plan participants and roughly $130 billion in client assets, lifting its overall platform to around 21 million participants and $2 trillion in total client assets on a pro-forma basis.
Great West chief executive David Harney positioned the move squarely within the company's capital deployment priorities.
"The acquisition reflects our disciplined approach to capital deployment and our focus on strengthening high-quality, capital-efficient growth platforms," Harney said. "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."
Empower CEO Edmund F. Murphy III said the deal fills a meaningful gap in the firm's competitive positioning.
"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," Murphy said. "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."
On the financial side, Milliman's retirement plan and benefits administration unit generated approximately $120 million in revenue in 2025. Great West is forecasting around $20 million in cost synergies within three years of closing, with total integration costs estimated at approximately $50 million, including technology work.
The consideration will be financed from existing cash resources, with $244 million payable at closing and the remainder spread over five years. Great West said the transaction carries no pro-forma impact on its holding company cash balance of $2.1 billion or its leverage ratio of 28%, as of March 31, 2026, and that the company retains sufficient flexibility for share repurchases in 2026 at levels comparable to last year, as well as further acquisition activity.
Milliman is retaining its actuarial consulting and healthcare business, and both parties expect to enter a preferred provider arrangement for select actuarial and defined benefit administration referrals once the deal closes.
The transaction is expected to close in the second half of 2026, subject to regulatory approvals and customary closing conditions. Great West trades on the Toronto Stock Exchange under the ticker GWO and is a member of the Power Corporation group of companies.
