WageWorks, Inc. (NYSE: WAGE), a leader in administering
Consumer-Directed Benefits (CDBs), today announced it has signed
definitive agreements to acquire Automatic Data Processing Inc.’s
(NASDAQ:ADP) Consumer Health Spending Account (CHSA) and
Consolidated Omnibus Reconciliation Act (COBRA) businesses.
This transaction is expected to close by the end of November, 2016
and further strengthens WageWorks' leadership position in the
Consumer-Directed Benefits market.
ADP’s CHSA and COBRA businesses provide a range
of services including HSA, HRA, FSA, commuter benefits, COBRA, and
direct bill administration to approximately 10,000 employer clients
in the United States.
The businesses will continue to service clients
and their employees out of their current Alpharetta, Georgia and
Louisville, Kentucky locations in the U.S. and Pune and Hyderabad
locations in India, supported by additional capabilities, products
and technologies provided by WageWorks.
WageWorks and ADP have also formed a partnership
in which WageWorks’ full suite of products and services will be
offered by ADP sales representatives to their extensive client base
and future customers.
"We are very pleased to welcome ADP’s CHSA and
COBRA businesses’ customers and employees to WageWorks. We believe
this transaction fits in very well with our stated acquisition
strategy of complementing our strong organic growth through
acquisitions and relationships that expand our employer and
employee participant base. We have an outstanding track record of
successfully integrating acquired companies, and see this
transaction as another strategic step in strengthening and growing
our business," said Joe Jackson, CEO of WageWorks. “In addition, we
are thrilled to have established an ongoing partnership with
ADP. They have several thousand sales people who will now be
able to offer our best-in-class services to their clients, and we
look to benefit from their leading position in cloud-based human
capital management.”
The transaction will be financed through both
cash on the balance sheet, as well as the drawdown from the
company’s existing line of credit.
WageWorks will host a conference call today,
November 1, 2016, at 5:30 pm. ET to further discuss this
acquisition and the expected financial impact.
The live webcast of the conference call can be accessed under
“Investor Relations” section of the Company’s website at
www.wageworks.com. Those wishing to participate in the live call
should dial (844) 778-4142 (toll-free) or (661) 378-9625, and enter
pass code 12524387. Following the call, an archived webcast will be
available in the “Investor Relations” section of the Company’s
website at www.wageworks.com. A replay will be available at (855)
859-2056 (toll-free) or (404) 537-3406 using the pass code
12524387.
Forward-Looking Statements
The statements made in this press release, and any other
statements (whether written or oral) that are made by us or on our
behalf (including, for the avoidance of doubt, in connection with
any conference call or any other communications contemplated
hereby) that relate to the subject matter addressed herein, and
that do not exclusively concern historical facts, are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934, which forward-looking statements (whether
written or oral) include, but are not limited to, forward-looking
statements (whether written or oral) relating to the Company, the
transaction, and the expected effects of transaction on the future
condition, results of operation or general prospects of the
Company. Without limiting the foregoing, these forward
looking statements (whether written or oral) may be identified by
words such as “believe,” “expect,” “anticipate,” “estimate,”
“contemplate,” “assume,” “future,” “goal,” “potential,” “predict,”
“project,” “projection,” “plan,” “intend,” “forecast,” “may,”
“will,” “could,” “would,” “should,” and other words or expressions
of similar meaning or import (including the negative of any such
words or expressions). Prior to making any investment
decision with respect to the Company, you must read and consider
carefully these (and any other) forward-looking statements (whether
written or oral) relating to the Company, the transaction, and the
expected effects of transaction on the future condition, results of
operation or general prospects of the Company. We caution that our
actual results may be materially different from our expected
results due to various risk factors and uncertainties, including,
but not limited to: (i) the continued availability of
tax-advantaged consumer-directed benefits to employers and
employees; (ii) our ability to execute our current and future
strategic plans and initiatives, including our new partnership with
ADP; (iii) our ability to retain current customers, and acquire and
retain future customers, including in connection with our new
partnership with ADP; (iv) our ability to retain current employees,
and acquire and retain future employees, in each case, as necessary
for the operation of the Company’s business, including our new
partnership with ADP; (v) a denial or delay with respect to any
required regulatory approvals (including, but not limited to, the
expiration of any applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976); (vi) the
effect of any legal proceeding that may be instituted against us or
others in respect of or relating to the transaction; (vii) the risk
that the announcement or pendency of the transaction could damage
our relationships with our existing employees, customers, suppliers
or other commercial counterparties, or otherwise adversely affect
our future condition, results of operation or general prospects;
and (viii) such other risk factors and uncertainties as are
identified in the Company’s annual report on Form 10-K for the
fiscal year ended December 31, 2015, and the Company’s quarterly
report on form 10-Q for the fiscal quarter ended June 30, 2016.
Given the foregoing risks factors and uncertainties, it is
critically important that, prior to making any investment decision
with respect to the Company, you read and carefully consider these
(and any other) forward looking statements (whether written or
oral) relating to the Company, the transaction, the expected
effects of transaction on the future condition, results of
operation or general prospects of the Company. We caution that all
forward-looking statements contained or incorporated by reference
herein (whether written or oral), represent our management’s
beliefs and assumptions only as of the date first made, and we
expressly disclaim any obligation to update any information
contained in these forward-looking statements (whether written or
oral), irrespective of any new information or facts, future events
or circumstances, or developments in respect of the foregoing. You
must read and consider carefully our filings with the SEC, with the
understanding that our actual results may be materially different
from the results we expect.
About WageWorks
WageWorks (NYSE: WAGE) is a leader in administering
Consumer-Directed Benefits (CDBs). WageWorks is solely dedicated to
administering CDBs, including pre-tax spending accounts, such as
Health Savings Accounts (HSAs), health and dependent care Flexible
Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs),
as well as Commuter Benefit Services, including transit and parking
programs, wellness programs, COBRA, and other employee benefits.
WageWorks makes it easier to understand and take advantage of
Consumer-Directed Benefits for approximately 58,000 employers and
approximately 4.5 million people. WageWorks is headquartered in San
Mateo, California, with offices in major locations throughout the
United States. For more information, visit www.wageworks.com.
Media Contact:
Britta Meyer
Chief Marketing Officer
650.577.5208
Britta.Meyer@wageworks.com
Investor Contact:
Staci Mortenson
ICR
203.682.8273
Staci.Mortenson@icrinc.com
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