HealthEquity Inc., a Draper-based independent health savings account custodian, has announced plans to acquire WageWorks Inc. of San Mateo, California. WageWorks is specializes in administering consumer-directed benefits such as health savings accounts (HSA), flexible spending accounts, health reimbursement accounts and commuter benefits services. In addition to its San Mateo headquarters, Wage Works has offices across the U.S. Founded in 2000, the company has about 2,000 employees.
HealthEquity was founded in 2002 in Tucson, Arizona and moved to Utah two years later. It employs 1,050 in its Utah operation.
HealthEquity will acquire all of the outstanding shares of common stock of WageWorks for $51.35 per share in cash, representing a total value of approximately $2 billion. The all-cash offer represents a 28 percent premium to the closing price of WageWorks shares for the 30 trading days prior to HealthEquity’s acquisition proposal becoming public on April 29.
HealthEquity said the acquisition is expected to give the company access to more of the fast-growing HSA market by expanding its direct distribution to employers and benefits advisors as a single-source, premier provider of HSAs and complementary CDBs, including flexible spending accounts, health reimbursement arrangements, COBRA administration and commuter accounts.
“Acquiring WageWorks positions us to accelerate the market-wide transition to HSAs, with greater market access and an end-to-end proprietary platform built to drive members to spend smarter while saving for healthcare in retirement,” said Jon Kessler, president and CEO. “Together, we can meet employers and employees wherever they are on their journeys to connect health and wealth, while simultaneously accelerating our growth in an expanding industry.”
Edgar Montes, president and CEO of WageWorks, said, “The combination of WageWorks and HealthEquity will be transformative in our industry and will amplify our impact among clients, brokers and policymakers. Together with HealthEquity, WageWorks can bring broader, deeper, more innovative solutions to our customers – giving them greater choice and peace of mind.”