Under terms of the agreement announced in a news release and during a stockholder meeting Wednesday, Voya will acquire all outstanding shares of Benefitfocus common stock for $10.50 per share in an all-cash transaction valued at approximately $570 million, inclusive of Benefitfocus debt and outstanding preferred shares.
Benefitfocus serves a brokerage and consulting firm in the health and benefits industry, working through its employer and health plan customers. The company says it “touches more than 25 million lives” on its platform. Combined with its own existing workplace customers, Voya will serve approximately 38 million individuals following completion of the acquisition, according to the news release.
“Our acquisition of Benefitfocus is an exciting opportunity to accelerate our workplace-centered strategy and increase our capacity to meet the growing demand for comprehensive benefits and savings solutions at the workplace,” Heather Lavallee, president and CEO-elect of Voya Financial Inc., said in the news release “Benefitfocus’ exceptional talent, strong capabilities, and extensive reach across the benefits industry will expand Voya’s ability to deliver innovative solutions for employers and health plans, and help improve the financial, physical and emotional wellbeing of their employees and members. At the same time, Voya’s technology resources, digital capabilities, and operational expertise will add tremendous value to Benefitfocus as it seeks to accelerate its growth and delivery of world-class services to more clients and partners.”
“We are excited to become part of Voya — bringing Benefitfocus’ portfolio of innovative solutions and services to support the health and wellbeing of more customers through the creation of an end-to-end continuum of offerings across health, wealth and investment,” Matt Levin, president and CEO of Benefitfocus, said in the release. “This transaction delivers significant and immediate value for our shareholders, broader opportunities for our associates, and strengthens our go-to-market offering with Voya’s platform of workplace-centered services and solutions.”
Less than 24 hours after the announcement, Benefitfocus stock was up $3.99 a share to $10.36 on the Nasdaq stock exchange.
Benefitfocus will continue to operate as a distinct business under Voya’s ownership, the news release said.
“This acquisition allows us to expand our capabilities and insights for our customers, while preserving the strength and breadth of our distribution reach,” Rob Grubka, CEO, Health Solutions, Voya Financial Inc., said in the release. “Our commitment to an open-architecture, product-agnostic approach at Benefitfocus, and to maintaining strategic partnerships with both clients and intermediaries, is unwavering. Voya will continue to offer valuable and competitive benefit products and solutions, and we will do so across industry platforms and in partnership with brokers.
“The capabilities and expertise that we gain with Benefitfocus as part of the Voya family will allow us to better serve other benefits administration providers; help brokers with their value proposition to employers; and create powerful, connected experiences with customers and partners across the workplace benefits industry,” added Grubka.
The transaction was unanimously approved by Benefitfocus’ board of directors and is expected to close in the first quarter of 2023. The deal is subject to customary closing conditions, including approval by Benefitfocus’ shareholders.
Perella Weinberg Partners LP is serving as financial adviser, and Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel to Voya in connection with this transaction. Barclays served as financial adviser, and Sullivan & Cromwell LLP served as legal counsel to Benefitfocus.