Lightyear Capital to Acquire FIS Healthcare Benefit Solutions Business for $335 Million

Published on Monday, 25 June 2012 08:19 Written by TradersHuddle Staff

NEW YORK-( Business Wire )-

Lightyear Capital LLC (“Lightyear”), a New York-based private equity firm focused on financial services investing, announced today that an affiliated investment fund has entered an agreement to acquire FIS’ Healthcare Benefit Solutions business from Fidelity National Information Services for $335 million.

The resulting new company, referred to herein as “Benefit Solutions”, is a leading 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.

Following the close of the transaction, Robert Natt will join Benefit Solutions as its full time Executive Chairman. Natt served as the CEO of MBI Benefits, a predecessor to Benefit Solutions, prior to its sale to Metavante in 2005. Natt was most recently the CEO of PayFlex, a leading Third Party Administrator (“TPA”). 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 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.”

“We’ve built the industry’s leading CDH administration platform and multi-purse debit card transaction processing system to enable our customers to provide the best healthcare benefit programs in the marketplace,” said Torre. “As an independent company, we will have even greater ability to develop new and innovative products for our clients and to adapt quickly to changes in the marketplace. We have a great team in place to meet these goals and are excited to partner with Lightyear and tap into their significant experience in scaling businesses.”

“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 B. Marron, Chairman of Lightyear. “Benefit Solutions’ market leading position in CDH account administration and payment services fits this profile well. We are pleased to partner with Bob Natt and Tom Torre and look forward to working with them to grow the company going forward.”

Benefit Solutions will continue to serve over 500 clients including TPAs and health insurance plans with technology solutions that administer and process approximately 11 million CDH accounts for their plan members and employee groups. Benefit Solutions will also continue to provide electronic and paper claim payment services and health plan ID card solutions for health insurers. Benefit Solutions will be headquartered in Waltham, MA, with operations in Carrollton, TX and Milwaukee, WI.

The Company will adopt a new name following the closing of the transaction. The transaction is expected to close by the end of the third quarter of 2012, subject to required regulatory approvals and customary closing conditions.

Simpson Thacher & Bartlett LLP acted as legal counsel to Lightyear in connection with the transaction.

About Lightyear Capital LLC

Lightyear Capital is a leading private equity firm making primarily control investments in North America based, middle-market financial services companies. Based in New York, Lightyear, through its affiliated funds, 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. Lightyear brings unique strengths and discipline to its investment process, as well as operating, transaction, and strategic management experience, along with significant contacts and resources beyond capital. The senior team of professionals averages over 25 years of financial services-related experience and includes Chris Casciato, David Cynn, Michael Doppelt, Stewart Gross, Thierry Ho, Donald Marron, Richard Sterne, and Mark Vassallo.

About FIS

FIS (NYSE: FIS) is the world’s largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100 countries. Headquartered in Jacksonville, Fla., FIS employs more than 32,000 people worldwide and holds leadership positions in payment processing and banking solutions, providing software, services and outsourcing of the technology that drives financial institutions. First in financial technology, FIS tops the annual FinTech 100 list, is 425 on the Fortune 500 and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.

Lightyear Capital LLCElliot SloaneSloane & Company212-446-1860orFISKim Snider904-438-6278