Genstar Capital is to sell Evolution1 to WEX for $532.5 million. Evolution1 provides software, payment and mobile solutions that administer and manage consumer directed healthcare accounts.
Genstar Capital, a leading middle market private equity firm that focuses on investments in targeted segments of the software, financial services, healthcare, and industrial technology industries, today announced the signing of a definitive agreement to sell Evolution1®, an industry leader in consumer directed health (CDH) payments and technology, to WEX Inc. (NYSE:WEX) for $532.5 million.
Evolution1 provides innovative software, payment and mobile solutions that administer and manage consumer directed healthcare accounts. The company’s administrative software solutions, driven by patented technology, allow more than 10 million consumers to spend electronically through prepaid funds in CDH accounts such as Health Spending Accounts (HSAs), Flexible Spending Accounts (FSAs), Defined Contribution, and more. Evolution1’s cloud-based solutions provide a single end-to-end intuitive user experience that reduces costs, saves time and ultimately simplifies the business of healthcare. Through its 1Plan by Evolution1® offering, Evolution1 is a leading technology provider to Defined Contribution health plans and private exchanges. Evolution1 has achieved a number of prestigious awards and recognitions, including being named to the annual Inc. 500|5000 for six consecutive years and Deloitte’s Technology Fast 500 for eight consecutive years, as well as Modern Healthcare’s Healthcare’s Hottest list, among other awards.
WEX represents more than 7.8 million cardholders and offers exceptional payment security and control across a wide spectrum of business sectors. Headquartered in South Portland, Maine, WEX has an additional 10 offices in the U.S. and abroad. The company employs 1,400 associates.
Eli Weiss, a Principal at Genstar said, “Evolution1 is an industry leader with a bright future. During Genstar’s ownership, Evolution1 developed and expanded its solutions to achieve strong organic growth. The company today serves more than 10 million consumers and more than 90,000 employer groups. The platform is poised to continue building on this momentum, and we are pleased to have worked with this talented senior management team to dramatically grow this business. It is gratifying that WEX sees the continued exciting growth prospects for Evolution1.”
Jeff Young, Chairman and Chief Executive Officer of Evolution1, said, “All of our core solutions have demonstrated consistent growth as we continue to build key relationships and sign multi-year partnerships with large health plans, banks, payroll providers, private exchanges, and leading third-party administrators. Our success is a result of our ability to help our partners simplify the healthcare experience for millions of employers and consumers, and we are pleased to have worked with the Genstar team who were instrumental to this successful outcome.”
The pending sale of Evolution1 follows the successful realizations this year from Genstar’s software investment platform of TravelClick, a global provider of innovative cloud-based software solutions to the hospitality industry, for $930 million and ConvergeOne, a leading independent provider of innovative communications solutions and managed services to enterprises globally.
“The successful investment in Evolution1 is another strong example of Genstar’s ability to transform businesses into innovative industry leaders,” said Jean-Pierre L. Conte, Chairman and Managing Director of Genstar Capital. “Evolution1 is particularly exciting as we coordinated our sector specialization from multiple industry disciplines – healthcare, software, and financial services – to build and grow this tremendous company. We are delighted to have worked with the Evolution1 management team, as this transaction marks an exciting moment and a successful exit for Genstar.”
The transaction is expected to be completed in the third quarter and is subject to customary regulatory approvals. Deutsche Bank and William Blair & Company acted as financial advisors to Evolution1 and Weil, Gotshal & Manges acted as legal advisor.
About Genstar Capital, LLC
Genstar Capital is a leading private equity firm that has been actively investing in high quality companies for more than 20 years. Based in San Francisco, Genstar works in partnership with its management teams and its network of operating executives and strategic advisors to transform its portfolio companies into industry-leading businesses. Genstar has more than $2.6 billion of committed capital under management and targets investments focused on selected sectors within the financial services, software, healthcare, and industrial technology industries.
Contact: Chris Tofalli
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