HealthEquity (HQY) Enters Deal to Acquire Further for $500M

April 8, 2021 4:40 PM EDT

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HealthEquity, Inc. (NASDAQ: HQY) entered into a definitive agreement to acquire Further, a leading provider of HSA and consumer directed benefit administration services, and the nation’s ninth largest HSA custodian overall.

The acquisition of Further and its technology expands HealthEquity’s leadership in the growing HSA market, enhances its ability to drive growth with health plans and other go-to-market partners, and adds to its Total Solution offering of remarkable products backed by trademark Purple service, education and engagement to help working families connect health and wealth.

Expanded HSA Leadership

With Further’s approximately 550,000 HSA customers and $1.7 billion HSA assets under its custody, HealthEquity will grow to approximately 6.3 million HSA Members and more than $16 billion in HSA Assets, adding to its position as the leading health savings custodian nationwide. The acquisition also immediately expands HealthEquity’s health plan footprint, particularly its commitment to not-for-profit health plans. Further also brings approximately 28,000 employer clients and over 300,000 consumer-directed benefit accounts (CDBs), including FSAs, HRAs and VEBAs.

Technology-Driven Partner Growth

Further’s private-label HSA and CDB solutions, deployed in the cloud, expand HealthEquity’s reach to a growing network of health plan, retirement plan, benefits administration, and other go-to-market partners. “By putting HealthEquity’s Total Solution inside of network partner applications and private-label brand environments, Further’s technology will align us more closely than ever before and enable new partnerships to introduce more consumers to HSAs,” said President and CEO Jon Kessler.

New VEBA Administration Capability

Further is also a technology leader in employer-funded Voluntary Employees' Beneficiary Association (VEBA) trust administration. VEBAs are triple-tax advantaged health accounts like HSAs, that cover medical costs while employed or post-retirement. VEBAs are not restricted to those in high-deductible health plans. “Adding VEBA capability to HealthEquity’s Total Solution brings a new choice to clients and partners seeking to offer differentiated benefits while controlling healthcare costs,” added Kessler.

A Legacy of Care

Further is part of Stella Health, a Minnesota-based family of companies committed to reinventing health care to improve health for the people it serves. In addition to Further, the Stella family includes Minnesota’s largest non-profit health plan; supportive medical care services; and a number of other subsidiary and affiliate companies. “For more than thirty years, Further has been helping people seamlessly manage their money, health and life,” said Jay Matushak, senior vice president and CFO of Stella. “We know our partners, employers, members and associates will be in great hands with HealthEquity. Their commitment to innovation, customer service and value is well-known and highly regarded within the HSA industry. With Stella placing a greater strategic emphasis on developing new care delivery models, HealthEquity was the ideal company to carry on Further’s legacy of helping people spend and save wisely on their health care.”

Financial Details

HealthEquity is purchasing Further for $500 million. At closing, management expects the transaction to add approximately $60 million in revenue on an annualized run-rate basis, with a 20% contribution to adjusted EBITDA margin. Management expects to achieve an additional $15 million in efficiencies on an annualized basis within three years, with $55 million of one-time costs incurred over that time period. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close by September 2021. Kessler continued, “We look forward to welcoming the talented Further family to our Purple culture, and to working together to deliver remarkable results to our members, clients, partners and expanded team.”


Willkie Farr & Gallagher LLP is serving as legal counsel and Perella Weinberg Partners LP is serving as exclusive financial advisor to HealthEquity. Stella has engaged Taft Stettinius & Hollister LLP for legal counsel and Wells Fargo Securities as exclusive financial advisor.

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