WEX agrees to acquire Illinois benefits administration company for $275M

File photo / Courtesy of WEX WEX Inc. is a financial technology service provider headquartered in Portland.

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Less than two weeks after completing its most recent acquisition, Portland-based financial technology services provider WEX Inc. (NYSE: WEX) on Wednesday unveiled an agreement for a $275 million purchase in the large and growing benefits administration sector.

The deal is for benefitexpress, a Schaumburg,Ill.-based provider of configurable, cloud-based benefits administration technologies and services.

WEX, led by Chair and CEO Melissa Smith, said the price is subject to working capital and other adjustments and that it expects to complete the transaction in the second quarter.

The news comes 13 days after WEX completed the acquisition of health savings accounts assets of HealthCareBank, the Fargo, N.D.-based custodian bank for customers of WEX's Health division, for around $250 million. That deal was announced in February.

On Wednesday, WEX said the acquisition of benefitexpress will significantly expand its offerings in benefits administration by adding enrollment and decision support tools for employees, benefits administration and value-added services such as Affordable Care Act compliance, dependent verification services and other benefit administration services.

Robert Deshaies, president of WEX's Health division, added that the acquisition will extend WEX's health and employee benefits products and services across the full, end-to-end needs of employer clients.

"We are excited to welcome the benefitexpress team to the WEX family and look forward to delivering increased value to employers, consumers and partners through a comprehensive and integrated suite of products, services and technologies," he said.

WEX spokesman Rob Gould told Mainebiz that benefitexpress employs around 300 people, and that the two businesses will continue to operate as two independent companies until after the deal is complete.

'Trusted partner for several years'

WEX said in Wednesday's news release that benefitexpress has been a "trusted partner" of its Health business for several years.

"In addition to making WEX an even more innovative and comprehensive technology and services provider to employers, brokers and partners, the combined opportunities for WEX within the public sector," the company added.

WEX expects the acquisition to be neutral to 2021 adjusted net Income.

Of WEX's three business segments, health and employee benefits was the only one that registered an increase in fourth-quarter revenues. Fourth-quarter revenues overall fell by 9%, partly due to lower average fuel prices and foreign exchange rates, as reported by the company in late February.