WageWorks (WAGE) to Acquire ADP's (ADP) CHSA, COBRA Businesses
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WageWorks, Inc. (NYSE: WAGE) announced it has signed definitive agreements to acquire Automatic Data Processing Inc.’s (Nasdaq: ADP) Consumer Health Spending Account (CHSA) and Consolidated Omnibus Reconciliation Act (COBRA) businesses. This transaction is expected to close by the end of November, 2016 and further strengthens WageWorks' leadership position in the Consumer-Directed Benefits market.
ADP’s CHSA and COBRA businesses provide a range of services including HSA, HRA, FSA, commuter benefits, COBRA, and direct bill administration to approximately 10,000 employer clients in the United States.
The businesses will continue to service clients and their employees out of their current Alpharetta, Georgia and Louisville, Kentucky locations in the U.S. and Pune and Hyderabad locations in India, supported by additional capabilities, products and technologies provided by WageWorks.
WageWorks and ADP have also formed a partnership in which WageWorks’ full suite of products and services will be offered by ADP sales representatives to their extensive client base and future customers.
"We are very pleased to welcome ADP’s CHSA and COBRA businesses’ customers and employees to WageWorks. We believe this transaction fits in very well with our stated acquisition strategy of complementing our strong organic growth through acquisitions and relationships that expand our employer and employee participant base. We have an outstanding track record of successfully integrating acquired companies, and see this transaction as another strategic step in strengthening and growing our business," said Joe Jackson, CEO of WageWorks. “In addition, we are thrilled to have established an ongoing partnership with ADP. They have several thousand sales people who will now be able to offer our best-in-class services to their clients, and we look to benefit from their leading position in cloud-based human capital management.”
The transaction will be financed through both cash on the balance sheet, as well as the drawdown from the company’s existing line of credit.
WageWorks will host a conference call today, November 1, 2016, at 5:30 pm. ET to further discuss this acquisition and the expected financial impact.
The live webcast of the conference call can be accessed under “Investor Relations” section of the Company’s website at www.wageworks.com. Those wishing to participate in the live call should dial (844) 778-4142 (toll-free) or (661) 378-9625, and enter pass code 12524387. Following the call, an archived webcast will be available in the “Investor Relations” section of the Company’s website at www.wageworks.com. A replay will be available at (855) 859-2056 (toll-free) or (404) 537-3406 using the pass code 12524387.
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