Lightyear’s Alegeus said to fetch more than $750 mln via sale to Vista

  • Sell-side advisers: B of A, Triple Tree
  • Strategics in the mix: HealthEquity, Wex
  • Company helps administer healthcare-benefit accounts

Vista Equity Partners prevailed in the highly-anticipated auction for Alegeus through a deal that multiple sources said valued the consumer-directed healthcare payment and processing firm north of $750 million.

The seller is financial-services-focused PE firm Lightyear Capital, which purchased the business in 2012 for $335 million as a carveout from Fidelity National Information Services.

Terms weren’t disclosed, but the deal was valued within the $750 million to $900 million range, multiple sources told Buyouts.

Buyouts initially reported in May that Alegeus — which helps administer healthcare-benefit accounts — was on the block and hoped to fetch $750 million-plus.

Buyouts subsequently reported that B of A Merrill Lynch had been retained to advise on the process. Triple Tree also offered sell-side financial advice, the Aug. 7 announcement said.

The Waltham, Massachusetts, company produces run-rate pro forma Ebitda of around $50 million, whereas non-adjusted Ebitda is in the $30 million range, one of the sources said.

At least one other sponsor seriously pursued Alegeus alongside software-focused Vista, while other participants in the process included HealthEquity, the publicly traded custodian of health savings accounts, and Wex, the payment-processing company Evolution1 bought in 2014, sources said.

Two of the sources added that prior to this year’s formal full-blown process, HealthEquity in 2017 came close to transacting with the company.

A Wex representative declined comment.

A HealthEquity spokesperson also declined to comment but pointed to the company’s June quarterly earnings call, during which the company’s CEO, Jon Kessler, commented on potential M&A opportunities and referenced news reports of a platform on the block.

For Vista, Alegeus joins existing healthcare-related investments including Greenway Health, the electronic-health-records company it took private in November 2013.

Led by CEO Steve Auerbach, Boston’s Alegeus helps administer healthcare-benefit accounts, including FSAs, HSAs, HRAs, wellness incentive, dependent care and commuter accounts.

The company serves more than 300 clients including insurance plans, third-party administrators and financial institutions. Alegeus said it processes more than $9.1 billion in healthcare payments annually, serving more than 40 percent of the benefit accounts in the market.

Representatives of Lightyear and Vista declined to comment, while Alegeus couldn’t be reached.

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