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Morneau Shepell continues to expand in the United States with planned acquisition

Morneau Shepell announces agreement to acquire Mercer’s stand-alone, large market, health and defined benefit pension plan administration business for its U.S. clients


  • Once completed, the acquisition of Mercer’s, stand alone, large market, health and defined benefit pension plan administration business for its U.S. clients will expand Morneau Shepell’s presence in the United States and strengthen its competitive position in the large market sector
  • Total purchase price of approximately USD $57 million subject to certain adjustments
  • Anticipated to be accretive in 2019 excluding acquisition related amortization of acquired intangibles

ATLANTA, May 6, 2019  Morneau Shepell Inc. (TSX:MSI) (“Morneau Shepell” or the “Company”), the leading provider of technology-enabled HR services that deliver an integrated approach to well-being, today announced that it has reached an agreement to acquire the stand-alone, large market, health and defined benefit (DB) pension plan administration business of Mercer in the United States (the “Business”). The purchase price of approximately USD $57 million is payable in cash.  Mercer is a global consulting leader in advancing health, wealth and career. The acquisition is subject to customary closing conditions and is expected to close in the third quarter of 2019.

“This planned acquisition is in line with our strategy to grow our business profitably in the U.S. market and further solidify Morneau Shepell as a leading provider of health and DB plan administration across the United States,” said Stephen Liptrap, President and Chief Executive Officer, Morneau Shepell. “I am looking forward to welcoming our new employees to Morneau Shepell. With their support and the support of our current staff, we will have the capacity and expertise to deliver exceptional services to our newly acquired clients.”

“We expect the transition to Morneau Shepell to be seamless,” said Louis Gagnon, Mercer’s President, U.S. & Canada. “We will work collaboratively with Morneau Shepell to ensure the ongoing delivery of quality service to our clients and their employees.”

Morneau Shepell has a history of successful acquisitions and integrations including in 2012 when Mercer and Morneau Shepell successfully worked together following Morneau Shepell’s acquisition of Mercer Canada’s benefits administration and large market pension administration business.

Mercer will continue to provide large market health and benefits administration as well as midmarket DB pension administration services when they are bundled with the company’s consulting and brokerage services, including Mercer Marketplace 365 and 365+.  Mercer will continue to provide large market health and benefit administration services for Mercer’s global clients who have employees in the United States.

Highlights of the acquisition

Morneau Shepell is a market leader in North America in the administration of health and DB pension plans and the proposed acquisition will significantly increase the Company’s presence in the U.S. stand-alone, large market health and welfare administration business. Subject to the satisfaction of certain conditions, through this acquisition, Morneau Shepell expects to gain 73 of Mercer’s large market health and defined benefit pension plan administration clients (1.9 million plan participants) in the United States. Included in the acquisition will also be the experienced teams that service these clients.

Management anticipates the acquisition to be accretive in 2019 excluding acquisition related amortization of acquired intangibles.  

The Company expects to fund the acquisition with the funds available in its revolving credit facility.

About Morneau Shepell

Morneau Shepell is the leading provider of technology-enabled HR services that deliver an integrated approach to well-being through our cloud-based platform. Our focus is providing everything our clients need to support the mental, physical, social and financial well-being of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement and benefits consulting, actuarial and investment services. Morneau Shepell employs almost 5,000 employees who work with some 24,000 client organizations that use our services in 162 countries. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit

Forward-Looking Information   

This news release contains "forward-looking statements" within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", "anticipate" or other words of similar effect may indicate a "forward-looking" statement. Forward-looking information in this news release includes: completion and timing of the proposed acquisition; anticipated earnings and future growth rates; anticipated accretion in respect of earnings per share; forecasted operating expenses; the quantum and timing of estimated synergies and financial benefits to be derived in respect of such synergies; financial and acquisition metrics; and future growth initiatives. The Company believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Forward-looking information herein is based on various assumptions and expectations that Morneau Shepell believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct. Those assumptions and expectations are based on information currently available to Morneau Shepell, including information obtained from third party sources, and the historic performance of Morneau Shepell's businesses and the Mercer Business. Such assumptions include anticipated financial performance, current business and economic trends, business prospects, currency, exchange and interest rates, cost estimates, Morneau Shepell's ability to obtain financing on acceptable terms and the timing of satisfaction of the conditions to closing of the acquisition, Morneau Shepell's ability to achieve cost-efficiencies and cross-selling anticipated to achieve expected synergies, and are subject to the risks and uncertainties set forth below. Readers are cautioned that the preceding list of assumptions is not exhaustive.

These forward-looking statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Company's publicly filed documents (available on SEDAR at Those risks and uncertainties include ability to maintain profitability and manage growth, reliance on information systems and technology, reputational risk, dependence on key clients, reliance on key professionals and economic conditions. Many of these risks and uncertainties can affect the firm's actual results and could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statement made by the Company or on the firm's behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements in this news release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities.

For further information:
Helen Reeves