HealthEquity to Acquire Provider of HSA and Benefit Administration Services
The HSA custodian says the acquisition will enhance its ability to drive growth with health plans and add to its Total Solution offering to help people connect their health and wealth.
HealthEquity, a health savings account (HSA) custodian, has announced that it has entered into a definitive agreement to acquire Further, a provider of HSA and consumer-directed benefit administration services, as well as an HSA custodian.
HealthEquity is making the acquisition for $500 million. At closing, which is expected in September, management anticipates the transaction will add $60 million in revenue on an annualized run-rate basis, with a 20% contribution to its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin.
HealthEquity says the deal will expand its leadership in the growing HSA market, enhance its ability to drive growth with health plans and add to its Total Solution offering to help people connect their health and wealth.
By absorbing Further’s 550,000 HSA customers and $1.7 billion in HSA assets, HealthEquity will serve 6.3 million HSA members with more than $16 billion in assets. Already one of the nation’s leading health savings custodians, HealthEquity says the deal will further strengthen its position, particularly among not-for-profit health plans.
Further also brings the company 28,000 employer clients and more than 300,000 consumer-directed benefit accounts (CBDs).
Further’s private-label HSA and CBD solutions, deployed in the cloud, will expand HealthEquity’s reach to a growing network of health plan, retirement plan, benefits administration and other go-to markets.
“By putting HealthEquity’s Total Solution inside of network partner applications and private-label brand environments, Further’s technology will align us more closely than ever before and enable new partnerships to introduce more consumers to HSAs,” says HealthEquity President and CEO Jon Kessler.