EDS acquires Towers Perrin's benefit outsourcing business

PLANO, Texas-EDS Corp.'s acquisition of Tower Perrin's benefit administration unit brings a huge, technologically savvy corporation into the benefits outsourcing arena and furthers the trend of providers broadening their range of services through acquisitions.

Last week, the two firms announced that EDS will purchase Towers Perrin's benefits outsourcing unit-Administration Solutions-for $420 million. The Towers Perrin unit now generates about $300 million a year in revenues.

As part of the transaction, EDS and Towers Perrin will form a new venture, combining Towers Perrin benefits administration services and EDS' existing payroll and HR-related outsourcing business. Among other things, the new venture-of which EDS will own 85% and Towers Perrin the remaining 15%-will provide such HR-related outsourcing services as work force administration, employee recruitment and relocation, as well as traditional benefits administration,