Exclusive: Blackstone plans IPO of U.S. benefits manager Alight - sources

By David French and Joshua Franklin

(Reuters) - Private equity firm Blackstone Group LP is readying an initial public offering (IPO) of Alight Solutions LLC, a U.S. provider of healthcare and retirement benefits services that could be valued at more than $7 billion, including debt, according to people familiar with the matter.

The IPO could some in the first half of 2019, the four sources said, almost two years after Blackstone acquired Alight from insurance broker Aon Plc , in a deal that valued it up to $4.8 billion. It would allow Blackstone to turn a profit by gradually selling its Alight stake in the stock market.

Blackstone has hired Bank of America Corp , JPMorgan Chase & Co and Morgan Stanley to underwrite Alight's IPO, the sources said. Blackstone will also consider any acquisition offers it may receive for Alight, even as it is focused on taking the company public, the sources added.

The IPO could raise between $500 million and $750 million, one of the sources said, cautioning that its exact timing depended on market conditions.

The sources asked not to be identified because the matter is confidential. Blackstone, JPMorgan and Morgan Stanley declined to comment, while Alight and Bank of America did not immediately respond to requests for comment.

Buyout firms have been prolific investors in businesses that help companies cut costs by outsourcing large parts of their administrative functions, since such operations can generate strong cash flows.

Lincolnshire, Illinois-based Alight offers benefits administration and cloud-based human resources services to 22 million people, and generated revenue of $2.3 billion in 2017, according to its website.

Before selling Alight to Blackstone last year, Aon had taken ownership of it as part of its acquisition in 2010 of Hewitt Associates Inc for $4.9 billion.

Dealmaking has heated up in the benefits sector this year, as some of these companies turn to dealmaking to counter fierce price competition for their services.

In October, French IT services company Atos SE completed a $3.4 billion cash deal to buy Michigan-based IT services provider Syntel Inc, and last week payroll processor Paychex Inc agreed to buy Oasis Outsourcing Acquisition Corp for $1.2 billion in cash.

In another deal by a private equity firm, Carlyle Group LP said in September that it had agreed to buy a majority stake in Sedgwick Claims Management Services Inc, the largest U.S. insurance claims service provider, for $6.7 billion.

(Reporting by David French and Joshua Franklin in New York; additional reporting by Mike Spector and Greg Roumeliotis in New York; Editing by Lisa Shumaker)