WEX Makes $532 Million Health Care Spending Play (June 17, 2014)
Payments M&A activity continues as corporate payments provider WEX Inc. announced a major move into the health care payments sector, entering a definitive agreement to acquire Evolution1 for $532.5 million. Expected to close in the third quarter of this year, the deal advances WEX’s strategy of expanding its business model into “high-growth, high-value markets with complex payment systems,” the company said. WEX also sees the acquisition as an opportunity to expand beyond its established B2B business into consumer-to-provider payments.
The projected growth in the health care sector was also an attractive aspect of the deal, according to WEX. Active in consumer-directed health spending, including payments made via health savings accounts and flexible spending accounts, Evolution1 processed more than 65 million transactions representing $5 billion in payment value in 2013. The Fargo, N.D.-based company’s cloud-based health care payment platform serves 90,000 employers and 10 million consumers in the U.S. and Canada.
“Health care is an important strategic market for WEX, and we look forward to leveraging our respective core competencies to a broader set of solutions that will enable our partners to grow and succeed in this rapidly changing environment,” Evolution1 President & COO Chris Byrd tells Paybefore.
WEX—formerly known as Wright Express—has made several major acquisitions over the past few years. The Portland, Me., company upped its presence in the U.K. and Europe when it purchased CorporatePay, a British program manager specializing in virtual prepaid cards in the corporate travel sector. In 2011, the company purchased Tampa, Fla.-based payroll card provider rapid! PayCard, following the 2010 acquisition of Australian prepaid processor Retail Decisions (ReD).
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