London-headquartered Aon PLC has agreed to sell its employee benefits business to Blackstone Group LP for close to $5 billion.

Blackstone, an investment company, thinks there is “significant opportunity” for future growth. It will be a standalone business, the company said.

Blackstone will pay $4.3 billion in cash up front and a further $500,000 based on future performance. The business is the largest benefits administration platform in the United States and serves close to 15 percent of the working population across more than 1,400 companies.

“We are excited to acquire a world-class leader of scale in health, retirement and HR services, providing critical human resources and benefits administration services to millions of employees and their families throughout the United States and Canada,” Peter Wallace, a senior managing director at Blackstone, said.

The company expects to see opportunities for investing in the technology services sector.

“Blackstone sees tremendous opportunity for investing in leading businesses within the technology-enabled services sector, where we believe there is a significant opportunity to accelerate future growth," he said. "We look forward to working with the excellent management team to continue to invest in and grow the company.”

The sale, rumored for months, allows Aon to move away from the capital-intensive requirements of managing an outsourcing platform, according to the company. Reuters, quoting sources within the company, reported last month that Clayton Dubilier & Rice LLC, another investment firm, was close to a deal with Aon.

Aon acquired the outsourcing business in 2010 as part of its $4.3 billion takeover of Hewitt Associates.

"This transaction reinforces Aon's position as the leading, global professional services firm focused on risk, retirement and health," Greg Case, president and CEO at Aon, said. "The sale of our outsourcing platform creates incremental capital to strengthen growth in core operations and accelerates the pursuit of inorganic growth opportunities that address emerging client needs, similar to recent acquisitions in cyber risk advisory and health brokerage solutions."

Aon’s Chris Michalak will be CEO of the new standalone business, Blackstone announced.

“The opportunity before us is tremendous," Michalak said. "Under new ownership with Blackstone, our clients will benefit from increased focus, innovation and investment in our already market-leading benefits and HR administration solutions. I am excited to lead our team of 22,000 colleagues forward into this new era with Blackstone.”

Total after-tax cash proceeds from the $4.8 billion sale are expected to be approximately $3 billion, subject to adjustments.

The transaction is subject to customary closing conditions, including receipt of specified antitrust clearances, and is expected to close by the end of the second quarter this year, Aon said in a press release.

"We believe that this world-class platform will thrive under Blackstone's ownership, providing clients the level of service and performance they have come to expect and allowing us to further reshape our portfolio to focus on stronger growth and higher return on invested capital opportunities consistent with our strategy," Case said.

Aon also expects to allocate part of the proceeds from this transaction to increase its share repurchases. This brings the authorized repurchase to $7.7 billion.

Blackstone is one of the largest investment firms in the world. Its asset management businesses has over $360 billion in assets, including investment vehicles in private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds.