Form 8-K WAGEWORKS, INC. For: Nov 01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

November 1, 2016

 

 

WageWorks, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-35232		94-3351864
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1100 Park Place, 4th Floor

San Mateo, California 94403

(Address of principal executive offices, including zip code)

(650) 577-5200

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01.

Entry into a Material Definitive Agreement.

On November 1, 2016, WageWorks, Inc., a Delaware corporation (the “Company”), entered into an Asset Purchase Agreement (the “APA”) by and among the Company, on the one hand, and ADP, LLC, a Delaware limited liability company (“ADP LLC”), and ADP Benefit Services, KY, Inc., a Kentucky corporation (“ADP Benefit Services” and, together with ADP LLC, “ADP”), on the other hand, pursuant to which the Company has agreed to purchase certain of ADP’s assets, excluding client contracts, and will assume certain of ADP’s liabilities, in each case, relating to ADP’s (i) Consumer Health & Spending Accounts (CHSA) business (consisting of the flexible spending accounts (FSA), health reimbursement arrangements (HRA), health spending accounts (HSA), tuition reimbursement, and commuter services businesses) (the “CHSA Business”), and (ii) COBRA business (consisting of the COBRA and direct bill businesses) (the “COBRA Business” and, the COBRA Business together with the CHSA Business, the “Business”), in each case, subject to the terms and conditions to be mutually agreed by the parties (including, but not limited to, certain exclusions in respect of specific assets and liabilities relating to the Business) (the “Transaction”).

As consideration for the Transaction, ADP will receive approximately $235 million in cash. The closing of the Transaction will be subject to reasonably customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

At or prior to the closing of the Transaction, the Company will make offers of employment to certain of ADP’s employees that service the Business, in each case, on such terms and conditions of employment to be mutually agreed by and among the Company, ADP and the applicable employee.

In connection with the APA, and as part of the transactions contemplated thereby, the Company and ADP entered into a Subcontracting Agreement, a Referral Agreement, a Transition Services Agreement, an Intellectual Property Licensing Agreement, and other ancillary agreements. Under the Subcontracting Agreement, the Company will service the client contracts of the Business that are retained by ADP, in each case, on a generally pass-through basis. Under the Referral Agreement, the Company and ADP will enter into a strategic relationship under which the ADP may introduce new clients to the Company and its services. Under the Transition Services Agreement, ADP will provide the Company with certain services during a transitional period to assist the Company in operating the Business. Under the Intellectual Property Licensing Agreement, the Company will receive licenses to certain intellectual property from ADP.

On November 1, 2016, the Company issued a press release announcing the entry into the Transaction. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

Forward-Looking Statements

The statements made in this 8-K, and any other statements (whether written or oral) that are made by us or on our behalf (including, for the avoidance of doubt, in connection with any press release or other communications, or any SEC filings, in each case, referenced, or incorporated by reference, in this 8-K) that relate to the subject matter addressed herein, and that do not exclusively concern historical facts, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which forward-looking statements (whether written or oral) include, but are not limited to, forward-looking statements (whether written or oral) relating to the

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Company, the transaction, and the expected effects of transaction on the future condition, results of operation or general prospects of the Company. Without limiting the foregoing, these forward looking statements (whether written or oral) may be identified by words such as “believe,” “expect,” “anticipate,” “estimate,” “contemplate,” “assume,” “future,” “goal,” “potential,” “predict,” “project,” “projection,” “plan,” “intend,” “forecast,” “may,” “will,” “could,” “would,” “should,” and other words or expressions of similar meaning or import (including the negative of any such words or expressions). Prior to making any investment decision with respect to the Company, you must read and consider carefully these (and any other) forward-looking statements (whether written or oral) relating to the Company, the transaction, and the expected effects of transaction on the future condition, results of operation or general prospects of the Company. We caution that our actual results may be materially different from our expected results due to various risk factors and uncertainties, including, but not limited to: (i) the continued availability of tax-advantaged consumer-directed benefits to employers and employees; (ii) our ability to execute our current and future strategic plans and initiatives, including our new channel partner relationship with ADP; (iii) our ability to retain current customers, and acquire and retain future customers, including in connection with our new channel partner relationship with ADP; (iv) our ability to retain current employees, and acquire and retain future employees, in each case, as necessary for the operation of the Company’s business, including our new channel partner relationship with ADP; (v) a denial or delay with respect to any required regulatory approvals (including, but not limited to, the expiration of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976); (vi) the effect of any legal proceeding that may be instituted against us or others in respect of or relating to the transaction; (vii) the risk that the announcement or pendency of the transaction could damage our relationships with our existing employees, customers, suppliers or other commercial counterparties, or otherwise adversely affect our future condition, results of operation or general prospects; and (viii) such other risk factors and uncertainties as are identified in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015, and the Company’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2016. Given the foregoing risks factors and uncertainties, it is critically important that, prior to making any investment decision with respect to the Company, you read and carefully consider these (and any other) forward looking statements (whether written or oral) relating to the Company, the transaction, the expected effects of transaction on the future condition, results of operation or general prospects of the Company. We caution that all forward-looking statements contained or incorporated by reference herein (whether written or oral), represent our management’s beliefs and assumptions only as of the date first made, and we expressly disclaim any obligation to update any information contained in these forward-looking statements (whether written or oral), irrespective of any new information or facts, future events or circumstances, or developments in respect of the foregoing. You must read and consider carefully our filings with the SEC, with the understanding that our actual results may be materially different from the results we expect.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release issued by WageWorks, Inc. dated November 1, 2016

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				WAGEWORKS, INC.
Date: November 1, 2016				By:		/s/ Joseph L. Jackson
						Joseph L. Jackson
						Chief Executive Officer and Director

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press release issued by WageWorks, Inc. dated November 1, 2016

Exhibit 99.1

 

Media Contact:		Investor Contact:
Britta Meyer		Staci Mortenson
Chief Marketing Officer		ICR
650.577.5208		203.682.8273
[email protected]		[email protected]

 

WageWorks Acquires ADP’s Consumer Health Spending Account and Consolidated Omnibus Reconciliation Act Businesses to Further Its Leadership Position

in Consumer-Directed Benefits

SAN MATEO, CA., November 1, 2016 — WageWorks, Inc. (NYSE: WAGE), a leader in administering Consumer-Directed Benefits (CDBs), today 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.

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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.

Forward-Looking Statements

The statements made in this press release, and any other statements (whether written or oral) that are made by us or on our behalf (including, for the avoidance of doubt, in connection with any conference call or any other communications contemplated hereby) that relate to the subject matter addressed herein, and that do not exclusively concern historical facts, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which forward-looking statements (whether written or oral) include, but are not limited to, forward-looking statements (whether written or oral) relating to the Company, the transaction, and the expected effects of transaction on the future condition, results of operation or general prospects of the Company. Without limiting the foregoing, these forward looking statements (whether written or oral) may be identified by words such as “believe,” “expect,” “anticipate,” “estimate,” “contemplate,” “assume,” “future,” “goal,” “potential,” “predict,” “project,” “projection,” “plan,” “intend,” “forecast,” “may,” “will,” “could,” “would,” “should,” and other words or expressions of similar meaning or import (including the negative of any such words or expressions). Prior to making any investment decision with respect to the Company, you must read and consider carefully these (and any other) forward-looking statements (whether written or oral) relating to the Company, the transaction, and the expected effects of transaction on the future condition, results of operation or general prospects of the Company. We caution that our actual results may be materially different from our expected results due to various risk factors and uncertainties, including, but not limited to: (i) the continued availability of tax-advantaged consumer-directed benefits to employers and employees; (ii) our ability to execute our current and future strategic plans and initiatives, including our new partnership with ADP; (iii) our ability to retain current customers, and acquire and retain future customers, including in connection with our new partnership with ADP; (iv) our ability to retain current employees, and acquire and retain future employees, in each case, as necessary for the operation of the Company’s business, including our new partnership with ADP; (v) a denial or delay with respect to any required regulatory approvals (including, but not limited to, the expiration of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976); (vi) the effect of any legal proceeding that may be instituted against us or others in respect of or relating to the transaction; (vii) the risk that the announcement or pendency of the transaction could damage our relationships with our existing employees, customers, suppliers or other commercial counterparties, or otherwise adversely affect our future condition, results of operation or general prospects; and (viii) such other risk factors and uncertainties as are identified in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015, and the Company’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2016. Given the foregoing risks factors and uncertainties, it is critically important that, prior to making any investment decision with respect to the Company, you read and carefully consider these (and any other) forward looking statements (whether written or oral) relating to the

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Company, the transaction, the expected effects of transaction on the future condition, results of operation or general prospects of the Company. We caution that all forward-looking statements contained or incorporated by reference herein (whether written or oral), represent our management’s beliefs and assumptions only as of the date first made, and we expressly disclaim any obligation to update any information contained in these forward-looking statements (whether written or oral), irrespective of any new information or facts, future events or circumstances, or developments in respect of the foregoing. You must read and consider carefully our filings with the SEC, with the understanding that our actual results may be materially different from the results we expect.

About WageWorks

WageWorks (NYSE: WAGE) is a leader in administering Consumer-Directed Benefits (CDBs). WageWorks is solely dedicated to administering CDBs, including pre-tax spending accounts, such as Health Savings Accounts (HSAs), health and dependent care Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, COBRA, and other employee benefits. WageWorks makes it easier to understand and take advantage of Consumer-Directed Benefits for approximately 58,000 employers and approximately 4.5 million people. WageWorks is headquartered in San Mateo, California, with offices in major locations throughout the United States. For more information, visit www.wageworks.com.

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