Voya will acquire Benefitfocus to bolster benefits administration capabilities

Voya Financial this week announced that it has reached a definitive agreement to purchase Benefitfocus. 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 brokerage and consulting firms in the health and benefits industry and, through its employer and health plan customers, touches more than 25 million lives on its platform. Combined with its own existing workplace customers, Voya will serve approximately 38 million individuals, or roughly 1 in 10 Americans, following completion of the acquisition.

“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,” says Heather Lavallee, president and CEO-elect of Voya. “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.”

Benefitfocus will operate as a distinct business under Voya’s ownership, with continuity in the existing Benefitfocus management team and a reaffirmed commitment to Benefitfocus’ broker, advisor and carrier relationships.

“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,” says Matt Levin, president and CEO of Benefitfocus. “This transaction delivers significant and immediate value for our shareholders and broader opportunities for our associates, and strengthens our go-to-market offering with Voya’s platform of workplace-centered services and solutions.”

Related: Health care M&As at near record in Q1

In addition to its significant strategic benefits, the transaction is expected to be immediately accretive, on a cash basis, to Voya’s adjusted operating earnings per share relative to buybacks and before any future revenue synergies are considered. The transaction, which represents a purchase price premium of approximately 49% over Benefitfocus’ closing stock price as of Oct. 31, was unanimously approved by Benefitfocus’ board of directors. It is expected to close in the first quarter of 2023 and is subject to customary closing conditions, including approval by Benefitfocus’ shareholders.