BenefitMall and CompuPay have merged through an equity financing led by Austin Ventures and including HarbourVest Partners. The merger of BenefitMall and CompuPay will create a national provider of employee benefit and payroll solutions.
BenefitMall and CompuPay (together, the “Company”) today announced a merger of the companies through an equity financing led by Austin Ventures (“AV”). The investor group also includes HarbourVest Partners. The combination of BenefitMall and CompuPay creates a leading national provider of employee benefit and payroll solutions. The Company will offer complete health insurance, benefits, payroll, and related products and services to small-to-medium sized businesses (“SMBs”) and their employees throughout the United States. The transaction closed on May 1, 2012, and financial terms were not disclosed.
“We are very pleased to facilitate the combination of BenefitMall and CompuPay and to provide the capital to accelerate the Company’s growth. AV had a successful investment through our partnership with the BenefitMall management team from 1999 to 2006 and AV Principal Scott Donaldson worked closely with CompuPay from 2003 to 2005. We have enjoyed longstanding relationships with both management teams and we are excited to partner with them again to build a significant player in the employee benefits and payroll market for SMBs,” said Joe Aragona, a General Partner with AV.
BenefitMall, headquartered in Dallas, Texas, is the largest general agency in the United States with 32 offices in 11 states serving a network of more than 20,000 brokers nationwide. CompuPay, headquartered in Miramar, Florida, is the second largest privately held payroll processor in the United States with 23 offices in 14 states serving customers in all 50 states. In total, the Company will serve a growing national client base of more than 160,000 SMBs with over 2.7 million employees.
Bernard DiFiore, Chief Executive Officer of BenefitMall, will be the CEO of the Company. Charles Lathrop, Chief Executive Officer of CompuPay, will be the President and Chief Revenue Officer of the Company. Both DiFiore and Lathrop will join the Board of Directors of the Company. Scott Kirksey, Chief Financial Officer of BenefitMall, will be the CFO of the Company and will join DiFiore and Lathrop to form the Company’s Executive Committee.
“We are thrilled to be joining forces with CompuPay and once again partnering with AV,” DiFiore said. “In addition to the clear strategic benefits of combining two highly complementary organizations, the integration of benefits and payroll will deliver substantial value to all of the Company’s constituencies including our clients, client employees, brokers, channel partners, and carriers.”
Lathrop expressed, “The combination of CompuPay’s referral-selling model for payroll and BenefitMall’s extensive broker network presents very exciting opportunities for growth. As trusted advisors to their clients, brokers are uniquely positioned to introduce multiple value-added products and services. CompuPay’s full service payroll capabilities and dedication to extreme customer service will be ideal complements to employee benefit plan offerings.”
“With a very strong balance sheet and access to significant additional capital, the Company is well positioned to grow rapidly. We intend to invest in our people, products, services, and distribution channels to expand organically and through acquisitions,” Kirksey added.
BenefitMall, the leader of integrated employee benefit solutions, provides industry leading technology and a national network of local offices that support the Broker distribution channel. Headquartered in Dallas, Texas and in business for more than 30 years, BenefitMall is the nation’s largest general agency offering sales support in 32 U.S. markets serving 11 states. Selling more than $1 billion in insurance premiums annually through a national network of more than 20,000 independent registered Brokers, BenefitMall offers thousands of plans from more than 125 leading insurance carriers. With more than 175,000 in-force groups, BenefitMall supports nearly two million employees and their dependents.
Visit www.benefitmall.com for more information.
CompuPay Inc. was founded in 1980 and today is the second largest privately held payroll company in the U.S. and fourth largest overall. Its growing network of local offices processes payroll for tens of thousands of companies ranging in size from one to over 10,000 employees in all 50 states. The company offers payroll and employer-related services such as workers’ compensation insurance, employee benefits, retirement plans and Section 125 and 132 plans to clients seeking highly flexible, innovative solutions to meet their growing business needs.
Visit www.compupay.com for more information.
About Austin Ventures
Austin Ventures (“AV”) has worked with talented entrepreneurs to build valuable companies for over 25 years. With $3.9 billion under management, AV is the most active venture capital and growth equity firm in Texas and one of the most established in the nation. With an investment focus on business services and supply chain, financial services, new media, Internet, and information services, AV invests at all stages of company development, from $100,000 in “planned experiments” in early-stage ideas to $100+ million investments in expansion rounds and recapitalizations. AV’s strategy is to partner with talented executives and entrepreneurs through its CEO-in-Residence and Entrepreneur-in-Residence programs.
About HarbourVest Partners
HarbourVest Partners, LLC is an independent global private equity firm that invests in venture, buyout, and private debt through investments in companies, partnership funds, and secondary purchases. Investors in HarbourVest’s funds include more than 350 institutional investors, including pension funds, endowments, foundations, and financial institutions throughout the U.S., Canada, Europe, Australia, Latin America, and Japan. HarbourVest and its subsidiaries have more than 230 professionals deployed in Boston, London, Hong Kong, Tokyo, and Bogota. The HarbourVest team invested over $4 billion directly in companies around the world, including growth equity financing for companies such as Wayfair, Global World-Check, and CareCentrix.