Voya Financial to buy OneAmerica’s retirement plan business

Voya Financial Inc. and OneAmerica Financial, Inc., announced that Voya agreed to buy OneAmerica’s full-service retirement plan business with its nearly $47 billion in assets.

Voya said the acquisition gives its full-service retirement business, within Wealth Solutions, strategically appealing scale and a wider range of capabilities that complement its current product suite, including competitive employee stock ownership plan administration, and new prospects to increase Voya's distribution footprint and strengthen its current advisor relationships.

The company said the initial purchase price of the transaction was $50 million, with deferred consideration of up to $160 million payable in the second quarter of 2026, contingent on certain incentives. Voya projected the deal would deliver at least $75 million in pre-tax adjusted operating earnings and more than $200 million of net revenue in the first year after closing. It said it is on track to return $800 million of excess capital to shareholders in 2024.

Once completed, Voya's Wealth Solutions Defined Contribution client assets will rise to $580 billion with total retirement plan and participant count respectively will be 60,000 and 7.9 million.

Acquisition will 'advance' growth

“This…will help advance our growth strategy by offering workplace benefits and savings solutions to more individuals," said Voya Financial CEO Heather Lavallee. "OneAmerica is a great fit for Voya since they are similarly driven in providing financial stability for their clients.”

New York City-based Voya began as ING U.S., the operating subsidiary of ING Group, which was spun off and went public in 2013. In April 2014, the company rebranded itself as Voya Financial.

Financial analysts generally have been bullish on Voya’s business strategies and growth plans and the news of the OneAmercia deal pushed its stock to a new high this year, gaining almost 7% since the deal was announced on Sept. 11.

“Voya Financial has three competitive advantages: its diversification model, recent acquisitions, and capacity for future growth,” said a recent analysis by Wilson Research, of Sacramento, Calif. “As a result of these advantages, the company has demonstrated the greatest long-term return at lower volatility than its competition.”

Eleven analysts recently evaluated Voya Financial and game 12-month average price targets of $82.45, with a high estimate of $82.45, before the OneAmerica transaction was announced.

'Industry-leading products' are cited

"OneAmerica Financial is putting its retirement business under the direction of a company capable of providing industry-leading products," said Scott Davison, chairman, president and CEO of Indianapolis-based OneAmerica. "We have been dedicated for 60 years to serve the retirement market by enabling our clients to face every day with more assurance. Voya is the company most likely to fulfill that promise. While we will concentrate on our remaining core product lines where we see enormous development potential, we see this as a fantastic opportunity for our clients and the OneAmerica Financial colleagues that will continue to expand with Voya.”

Executives said Voya's decision to buy OneAmerica retirement plan business would expand its Workplace Solutions businesses, supporting more participants with their workplace benefits and savings needs and broaden all sectors, With the ability to serve companies of all offerings to all sectors including startup, Emerging and Mid, Large and Mega market plans.

"OneAmerica's wide spectrum of retirement options, together with our current product line and digital solutions, offers a chance to stretch Voya's reach across all market segments to deliver health, wealth and investment solutions through the workplace and institutions,” said Rob Grubka, CEO, Workplace Solutions, Voya Financial.

Subject to usual closing conditions including regulatory approvals, the transaction is expected to close on January 1, 2025.

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].