HealthEquity Inc. has agreed to buy WageWorks Inc. for $2 billion to gain more access to the market for health savings accounts.
HealthEquity, Inc., which calls itself the nation’s largest HSA non-bank custodian, and WageWorks, Inc., which administers HSAs and complementary consumer-directed benefits, have entered into a definitive agreement under which HealthEquity will acquire all of the issued and outstanding shares of common stock of WageWorks for $51.35 per share in cash.
According to a press release, the acquisition is expected to give HealthEquity “access to more of the fast-growing HSA market by expanding its direct distribution to employers and benefits advisors as a single source, premier provider of HSAs and complementary CDBs, including flexible spending accounts, health reimbursement arrangements, COBRA administration and commuter accounts.”
The all-cash offer represents a 28% premium to the volume weighted average closing price of WageWorks shares for the 30 trading days prior to HealthEquity’s acquisition proposal becoming public on April 29, 2019.
HealthEquity says it has identified significant synergy opportunities and anticipates approximately $50 million in annualized, ongoing synergies that will be realized within 24 to 36 months of closing, “primarily through custodial and interchange revenue and operating efficiencies.” HealthEquity says it also anticipates generating “significant incremental revenue synergies over time as the combined client base takes advantage of the complete offering.”