- Advances WEX’s employee benefits platform with the addition of one
of the fastest-growing solutions providers in the marketplace
- Complements WEX’s technology platform with leading benefits account
technology
SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Jan. 17, 2019--
WEX
(NYSE:WEX), a leading financial technology service provider, today
announced the signing of an agreement to acquire Discovery Benefits,
Inc. (DBI), a high-growth employee benefits administrator to more than
one million consumers across all 50 states. DBI plays a key role in the
consumer-directed healthcare ecosystem by offering account
administration technology and services.
DBI has been a well-established partner of WEX’s Health division for
more than a decade, trusting WEX’s proven healthcare technology platform
to manage a portion of its consumer-directed account administration.
This acquisition will combine one of the industry’s fastest-growing
benefits administrators—known for its leading benefits account
technology—with WEX’s dynamic, cloud-based technology platform. The
acquisition is expected to accelerate WEX’s growth rate, provide
partners and customers with a more comprehensive suite of products and
services, and expand the Company’s diverse go-to-market channels to
include consulting firms and brokers.
“The acquisition of Discovery Benefits enhances WEX’s position as a
leading technology platform in the healthcare space and aligns with our
longer-term strategy to further reduce exposure to macroeconomic
forces,” said Melissa Smith, CEO of WEX. “This combination strengthens
our overall value proposition through new partnerships, integrated
products, and the opportunity to offer a more comprehensive set of
solutions. We are excited to extend our reach into the rapidly-growing
employee benefits market and look forward to building on our track
record of success in the healthcare space.”
According to the latest research from Devenir on the top 20 HSA
providers, DBI is the fastest-growing provider. The company generated
approximately $100 million in revenue during 2018. Under the terms of
the agreement, WEX will pay a total cash consideration of approximately
$425 million, including $50 million which will be deferred until January
of 2020. In addition, the transaction is expected to generate
approximately $50 million in net present value of tax benefits. WEX is
in advanced discussions with its relationship banks to expand available
borrowing capacity and expects to announce further details regarding
these arrangements in the near future. The sellers of DBI will also
retain an equity interest of approximately 5% of the entity resulting
from the combination of WEX’s Health division and Discovery Benefits.
WEX expects the acquisition to be immaterial to adjusted net income in
year one and yield approximately $15 million in annual run-rate
synergies within the first 24 months following the close of the
transaction. The transaction is expected to close in the first quarter
of 2019, subject to regulatory approvals and other customary closing
conditions.
About WEX
Powered by the belief that complex payment systems can be made simple,
WEX (NYSE: WEX) is a leading financial technology service provider
across a wide spectrum of sectors, including fleet, travel and
healthcare. WEX operates in more than 10 countries and in more than 20
currencies through more than 3,500 associates around the world. WEX
fleet cards offer 11.5 million vehicles exceptional payment security and
control; purchase volume in its travel and corporate solutions grew to
$30.3 billion in 2017; and the WEX Health financial technology platform
helps 300,000 employers and more than 25 million consumers better manage
healthcare expenses. For more information, visit www.wexinc.com.
Safe Harbor Statement
Certain matters discussed in this press release are "forward-looking
statements" intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such by
the context of the statements, including words such as “believe,”
“expect,” “anticipate,” “plan,” “may,” “would,” “intend,” “estimate,”
“guidance” and other similar expressions, whether in the negative or
affirmative, although not all forward-looking statements contain such
words. These forward-looking statements are based on current
expectations, estimates, forecasts and projections about the industry
and markets in which the Company operates and management’s beliefs and
assumptions. There can be no assurance that the benefits of the proposed
acquisition will: be successful in accelerating the Company’s growth
rate; increase the Company’s product suite; be successful in expanding
capacity; achieve expected financial results with regard to accretion;
achieve synergy targets; close at all or in the first quarter of 2019;
or, enable advanced partner or customer offerings. The Company cannot
guarantee that it actually will achieve the financial results, plans,
intentions, expectations or guidance disclosed in the forward-looking
statements made. Such forward-looking statements involve a number of
risks and uncertainties, any one or more of which could cause actual
results to differ materially from those described in such
forward-looking statements. Such risks and uncertainties include or
relate to, among other things: the effects of general economic
conditions on fueling patterns as well as payment and transaction
processing activity; the impact of foreign currency exchange rates on
the Company’s operations, revenue and income; changes in interest rates;
the impact of fluctuations in fuel prices; the effects of the Company’s
business expansion and acquisition efforts; potential adverse changes to
business or employee relationships, including those resulting from the
completion of an acquisition; competitive responses to any acquisitions;
uncertainty of the expected financial performance of the combined
operations following completion of an acquisition; the ability to
successfully integrate the Company's acquisitions; the ability to
realize anticipated synergies and cost savings; unexpected costs,
charges or expenses resulting from an acquisition; the Company's failure
to successfully operate and expand ExxonMobil's European and Asian
commercial fuel card programs; the failure of corporate investments to
result in anticipated strategic value; the impact and size of credit
losses; the impact of changes to the Company's credit standards;
breaches of the Company’s technology systems or those of third-party
service providers and any resulting negative impact on the Company’s
reputation, liabilities or relationships with customers or merchants;
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; failure to successfully implement
the Company’s information technology strategies and capabilities in
connection with its technology outsourcing and insourcing arrangements
and any resulting cost associated with that failure; the actions of
regulatory bodies, including banking and securities regulators, or
possible changes in banking or financial regulations impacting the
Company’s industrial bank, the Company as the corporate parent or other
subsidiaries or affiliates; the impact of the Company’s outstanding
notes on its operations; the impact of increased leverage on the
Company's operations, results or borrowing capacity generally, and as a
result of acquisitions specifically; the incurrence of impairment
charges if the Company’s assessment of the fair value of certain
reporting units changes; the uncertainties of litigation; as well as
other risks and uncertainties identified in Item 1A of the Company’s
Annual Report for the year ended December 31, 2017, filed on Form 10-K
with the Securities and Exchange Commission on March 1, 2018.
The Company's forward-looking statements do not reflect the potential
future impact of any alliance, merger, acquisition, disposition or stock
repurchases. The forward-looking statements speak only as of the date of
this press 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190117005121/en/
Source: WEX
Media Contact:
Rob Gould
1-207-523-7429
robert.gould@wexinc.com
Investor
Contact:
Steve Elder
steve.elder@wexinc.com
207.523.7769