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Advances WEX’s strategy to provide solutions to high-growth
industries with complex payment systems
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Enhances healthcare industry expertise and specialized payment
categories
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Accretive to Adjusted Net Income in the first 12 months after
close, excluding acquisition costs
SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Jun. 16, 2014--
WEX
Inc. (NYSE: WEX), a leading provider of corporate payment solutions,
and Evolution1, a leader in cloud-based technology and payment solutions
in the healthcare industry, today announced that they have entered into
a definitive agreement for WEX to acquire Evolution1 for $532.5 million
in cash. The transaction is expected to be accretive to adjusted net
income in the first 12 months after close, excluding acquisition
costs, and to close in the third quarter of this year.
“The acquisition of Evolution1 advances WEX’s long-term strategy to
extend our scalable business model into high-growth, high-value markets
with complex payment systems,” said Melissa Smith, WEX’s president and
chief executive officer. “As a leading provider of technology-based
solutions that simplify healthcare payments, Evolution1 will enable WEX
to address multiple aspects of the healthcare payment system, expanding
our addressable market while building on our growth in the fleet and
travel space. Similar to WEX, Evolution1 has established strong partner
loyalty through its innovative technologies, and together we will
enhance our position in an attractive vertical that will serve as the
cornerstone of WEX’s Healthcare solutions strategy.”
Jeff Young, chairman and chief executive officer of Evolution1, said,
“WEX is a great fit for Evolution1 both culturally and operationally,
enabling the business to enhance its leadership position in the
consumer-directed healthcare payments space. WEX is well established as
a premier payment solutions provider, and we will now have the ability
to leverage its expertise in payment processing, account servicing and
transaction processing to meet our customers’ increasing healthcare
management needs.”
Significant Healthcare Market Opportunity
The payment system within the healthcare industry consists of three
primary parties – consumers, providers and payers, with employers and
exchanges as intermediaries – that all have different payment
relationships and responsibilities according to an intricate set of
business rules. To date, WEX has focused on virtual product solutions
for payer to provider payments, which accounts for almost $1 trillion
dollars of annual spend industry wide. This will continue to be an area
of further opportunity for the company.
WEX also sees an opportunity to address other aspects of the healthcare
system, consumer to provider payments, as more spend is shifting toward
consumer controlled. Through the acquisition of Evolution1, WEX will
build on its existing B2B business model, providing payment services to
intermediaries such as exchanges and third party administrators (TPA)
that have direct contact with consumers.
Evolution1 currently has an addressable market of more than $1 billion
in revenue with a meaningful and growing market share position. This
market opportunity is expected to double by 2019.
Evolution1 – A Leading Provider
Evolution1 is a leading provider of cloud-based technology and payment
solutions that help simplify the healthcare experience for millions of
employers and consumers. In 2013, Evolution1 processed over 65 million
transactions and $5 billion in payment volume. To date, it serves 90,000
employers and 10 million consumers in the U.S. and Canada. The company’s
powerful, all-in-one, multi-tenant technology platform, card products,
and mobile offering supports a full range of healthcare account types.
This includes consumer-directed payments for Health Savings Accounts
(HSA), Health Reimbursement Arrangements (HRA), Flexible Spending
Accounts (FSA), Voluntary Employee Beneficiary Associations (VEBA), and
defined contribution and wellness programs. Evolution1 has approximately
500 partners using and distributing solutions, among health plans, TPAs,
financial institutions, payroll companies and software providers.
Headquartered in Fargo, ND, Evolution1 has more than 300 employees
including an experienced senior management team that brings deep
software, payments and healthcare expertise.
Transaction Details
WEX Inc. and Evolution1 have entered into a definitive agreement through
which WEX will acquire Evolution1 for $532.5 million, which will be
funded through cash on hand and WEX’s existing credit facility. This
transaction is expected to generate approximately $42 million in present
value of tax benefits to WEX and is expected to be accretive to adjusted
net income in the first 12 months after close, excluding acquisition
costs. The transaction, which has been unanimously approved by the
boards of directors of both companies, is subject to regulatory
approvals and other customary closing conditions and is expected to
close in the third quarter of this year.
BofA Merrill Lynch acted as financial advisor to WEX while WilmerHale
provided legal counsel. Deutsche Bank acted as financial advisor to
Evolution1 while Weil Gotshal & Manges provided legal counsel.
Conference Call Details
In conjunction with this announcement, WEX will host a conference call
today, June 16 at 5:30 p.m. (ET). The conference call will be webcast
live on the Internet, and can be accessed at the Investor Relations
section of the WEX website, http://www.wexinc.com.
The live conference call also can be accessed by dialing (866) 334-7066
or (973) 935-8463. A replay of the webcast will be available on the
Company's website.
About WEX Inc.
WEX Inc. (NYSE: WEX) is a leading provider of corporate payment
solutions. From its roots in fleet card payments beginning in 1983, WEX
has expanded the scope of its business into a multi-channel provider of
corporate payment solutions representing more than 7.8 million
cardholders and offering exceptional payment security and control across
a wide spectrum of business sectors. The Company’s operations include
WEX Bank, Fleet One, Pacific Pride, rapid! PayCard, WEX Australia, WEX
New Zealand and WEX Europe, as well as a majority equity position in WEX
Europe Services and UNIK S.A., Brazil. WEX and its subsidiaries employ
more than 1,400 associates. For more information about WEX, please visit www.wexinc.com.
About Evolution1
At Evolution1®, we simplify the business of healthcare. We do
that through innovative healthcare software and payment solutions that
administer and manage consumer directed accounts. But we don’t do it
alone. Our network of Partner organizations enables us to deliver our
industry-leading solution to 90,000 employers and more than 10,000,000
consumers across the country. Together we take the complexity out of
defined contribution, HSAs, HRAs, FSAs, VEBAs, PRAs, wellness plans and
transit plans. Created with users in mind, our solutions provide a
single end-to-end intuitive user experience that reduces costs, saves
time and ultimately simplifies the business of healthcare.
Forward-Looking Statements
This news release contains forward-looking statements, including
statements regarding WEX’s plans to acquire Evolution1; future financial
performance for WEX and Evolution1 and the related underlying
assumptions; management’s expectations for future growth opportunities;
the expected closing date of the transaction; and, confidence in future
performance. Any statements that are not statements of historical facts
may be deemed to be forward-looking statements. When used in this news
release, the words "may," "could," "anticipate," "plan," "continue,"
"project," "intend," "estimate," "believe," "expect" and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such words. These
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially,
including: the effects of general economic conditions; the effects of
the Company’s business expansion and acquisition efforts; the Company’s
failure to successfully integrate the acquired business; the Company's
failure to consummate previously announced business plans; the Company’s
failure to maintain or renew key agreements; failure to expand the
Company’s technological capabilities and service offerings as rapidly as
the Company’s competitors; the impact of foreign currency exchange rates
on the Company’s operations, revenue and income; changes in interest
rates; the impact of the Company’s outstanding debt on its operations;
the incurrence of impairment charges if our assessment of the fair value
of certain of our reporting units changes; the uncertainties of
litigation; as well as other risks and uncertainties identified in Item
1A. of the Company's annual report on Form 10-K filed with the
Securities and Exchange Commission on February 27, 2014 and the
Company's subsequent periodic and current reports. The Company's
forward-looking statements and these factors do not reflect the
potential future impact of any other alliance, merger, acquisition,
disposition or stock repurchases. The forward-looking statements speak
only as of the date of this news release and undue reliance should not
be placed on these statements. The Company disclaims any obligation to
update any forward-looking statements as a result of new information,
future events or otherwise.
Source: WEX Inc.
WEX Inc.
News media contact:
Jessica Roy, 207-523-6763
Jessica.Roy@wexinc.com
or
Investor
Relations contact:
Michael E. Thomas, 207-523-6743
Michael.Thomas@wexinc.com