WEX Inc. WEX yesterday announced that it has inked a deal to purchase benefitexpress for a sum total of nearly $275 million. The acquisition is expected to be neutral to the company’s adjusted net income in 2021. Subject to regulatory approvals and other customary closing conditions, the deal is expected to close during the second quarter of 2021.
benefitexpress is a provider of cloud-based benefits administration technologies and services. It has been a trusted partner of WEX’s Health division for many years.
Over the past six months, shares of WEX have gained 50.8% compared with 10.8% rise of the industry it belongs to.
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How Will WEX Benefit?
benefitexpress is expected to expand WEX’s offerings in benefits administration by bringing in a complementary suite of solutions to WEX’s Health offerings, which includes enrollment and decision support tools for employees, benefits administration, and other value-added services, such as Affordable Care Act compliance, dependent verification services, and other benefit administration services. As a result, the deal should extend WEX’s health and employee benefits products and services across the employer clients.
Further, the deal is expected strengthen WEX’s competitive position within the public sector as well as among employers, brokers, and partners.
Notably, Robert Deshaies, president at WEX’s Health division, said, "The acquisition of benefitexpress accelerates our strategic vision of offering a complete healthcare ecosystem with a highly complementary benefits administration platform at its core." He further added, "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."
Zacks Rank and Stocks to Consider
WEX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Servicessector are Accenture ACN, Charles River Associates CRAI and TeleTech HoldingsTTEC, each carrying a Zacks Rank #2 (Buy).
The long-term expected earnings per share (three to five years) growth rate for Accenture, Charles River Associates and Gartner is 10%, 13% and 14.7%, respectively.
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