The new company will combine EDS – which provides technology and benefits processing – and Towers Perrin , a benefits administration and HR provider. The new company will have about $600 million in global revenues, with about half coming from each company, according to a press release. EDS will own approximately 85% of the new company, with Towers Perrin in control of the rest. The company will combined Towers Perrin’s Administration Solution and EDS’ payroll and related HR outsourcing business.
Towers Perrin, through a marketing alliance, will also provide consulting services to clients of the new company in plan design, communication, change management and other areas, according to the press release.
EDS vice president of HR services Steve Bohannon will lead the company, and EDS will pay Towers Perrin around $420 million as part of the agreement. The deal is expected to close by the end of the first quarter of 2005.
Towers Perrin also awarded EDS a 10-year contract worth $365 million for information technology outsourcing services. The contract calls for EDS to design, implement and operate an end-to-end IT solution to support Towers Perrin’s global network, desktop, and hosting environment, according to the news release.