Payers

WEX snaps up Discovery Benefits for $425 million

Discovery Benefits provides account administration for consumer-directed benefits like flexible savings accounts and health savings accounts.

Global payments services company WEX has acquired Fargo, North Dakota-based employee benefits administrator Discovery Benefits for $425 million.

Discovery Benefits provides account administration for consumer-directed benefits like flexible savings accounts and health savings accounts.  The company earned roughly $100 million in revenue in 2018 and offers its services to more than one million consumers across the country.

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The deal is expected to close in the first quarter of 2019, subject to regulatory approval.

South Portland, Maine-based WEX has made increasing strides into healthcare since its 2014 acquisition of cloud-based health payments company Evolution1, which it renamed WEX Health.

The company’s cloud-based software helps to administer benefits accounts like HSAs, HRAs, FSAs, VEBAs, COBRA, defined-contribution, wellness plans, and transit plans.

WEX has been working in partnership with Discovery Benefits for more than a decade, but decided to pursue an acquisition to scale up its Health division and invest further in its health benefits technology.

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“The consumer-directed healthcare market is thriving right now, and WEX plans to extend its reach and presence within this space,” said Jeff Young, president of WEX’s Health division, in an email.

Young added that the purchase of Discovery Benefits will allow the company to provide additional capabilities to customers such as carrier integration tools.

More potential acquisitions could be on the horizon for WEX Health which is focusing on increasing addressable market opportunities and enhance our customer loyalty while strengthening our overall value proposition, according to Young.

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