FinTech WEX Buys Discovery Benefits
Financial technology services company WEX is going to acquire Discovery Benefits (DBI), an employee benefits administrator, the company announced on Thursday (Jan. 17).
DBI has more than one million consumers in 50 states, and with its account administration tech and services, it’s a key player in the consumer-facing healthcare system.
WEX’s health division has been partnered with DBI for more than 10 years, and DBI has used WEX’s healthcare tech platform to oversee a large slice of its consumer account administration.
When the two companies combine, DBI, known for its benefits account technology, will get WEX’s cloud-based platform. WEX said the acquisition is going to accelerate the company’s growth rate, and will allow partners and also customers a broader and more comprehensive library of products and services. It will also expand diverse market channels, including 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 new research by Devenir on the top 20 health savings account (HSA) providers, DBI was named the fastest growing. In 2018 alone, the company generated $100 million in revenue. WEX said it will pay about $425 million under the agreement terms, with $50 million deferred until January of next year. The transaction should generate $50 million in net present value of tax benefits.
The transaction will close in Q1 of 2019, and is subject to regulatory approvals and the expected closing conditions.