Lightyear Capital announced today that it has entered into an agreement to acquire FIS’ Healthcare Benefit Solutions business from Fidelity National Information Services for $335 million. “Lightyear has been investing in payments and transaction processing businesses for many years and has focused on companies with strong recurring revenues and solid growth opportunities,” said Donald Marron, Chairman of Lightyear. “Benefit Solutions’ market leading position in CDH account administration and payment services fits this profile well.”
The resulting new company, renamed “Benefit Solutions”, is a financial technology company providing benefits administration software as a service, multi-purse debit cards and transaction processing solutions for consumer directed healthcare (“CDH”) accounts. CDH accounts enable employees to save money to pay for their rising out-of-pocket healthcare expenses. A recent industry study by Aite projects significant growth in the CDH market. Benefit Solutions has the number one market share in both healthcare benefit administration and debit card processing technology and is the only integrated technology provider in the CDH sector. Benefit Solutions will be headquartered in Waltham, MA, with operations in Carrollton, TX and Milwaukee, WI (www.fisglobal.com/products-healthcare).
Following the close of the transaction, Robert Natt will join Benefit Solutions as its full time Executive Chairman. Mr. Natt served as the CEO of MBI Benefits, a predecessor to Benefit Solutions, prior to its sale to Metavante in 2005. He was most recently the CEO of PayFlex, a leading Third Party Administrator. Thomas Torre, currently Senior Vice President and General Manager of Benefit Solutions, who has been with the business since 2005, will become Chief Executive Officer. “The growth in consumer directed healthcare is driven by the need to slow the rise in employers’ healthcare costs and the opportunity to enable employees to take greater control of how they allocate their healthcare dollars,” said Mr. Natt. “Health plans and TPAs want to offer the widest range of choices to their clients to accommodate these trends. I am especially excited about working again with Tom and the Benefit Solutions team as we continue to offer industry-leading CDH technology solutions to our customers.”
Lightyear Capital makes control investments in North America-based, middle-market financial services companies. Lightyear has managed approximately $3 billion of committed capital with investments across the financial services spectrum, including asset management, banking, brokerage, financial technology, insurance, and specialty finance. The firm is located in New York, NY (www.lycap.com).