FIS to sell healthcare benefits business for $335M
JACKSONVILLE, Fla. (AP) — Fidelity National Information Services Inc. said Monday that it reached a deal to sell its healthcare benefits business to investment firm Lightyear Capital for $335 million in cash.
Jacksonville, Fla.-based FIS, which provides software and services for banks and other financial companies and operates the NYCE debit payments network, said the sale is expected to close by Sept. 30, subject to regulatory approvals and customary closing conditions.
The sale includes FIS' consumer-focused healthcare and health and financial network businesses, which provide benefits administration, debit card and benefit account processing and payment services to consumers, healthcare providers and payers, the company said.
The business generated about $120 million in revenue and 5 cents per share in adjusted earnings per share in 2011, the company said.
New York-based Lightyear, a private equity firm, said Benefit Solutions will be renamed and based in Waltham, Mass., with operations in Carrollton, Texas and Milwaukee. It named Robert Natt, the former CEO of PayFlex, as executive chairman and Thomas Torre as CEO of Benefit Solutions, from his current position as senior vice president and general manager.
FIS said it will keep its government-sponsored electronic benefits transfer businesses and programs. The company said the sale is in line with its efforts to focus on financial institutions and efforts to stay atop markets where it has meaningful scale.
The sale is expected to reduce FIS' second-quarter adjusted earnings from continuing operations by about 2 cents per share. After-tax proceeds related to the deal are expected to total about $220 million.
FIS also said it expects the sale to reduce its full-year 2012 profit from continuing operations by up to 7 cents per share, but not affect its adjusted earnings per share in 2013.
The company said its unadjusted after-tax loss related to the sale is expected to total about $55 million, or 19 cents per share, which will be recorded as part of its third-quarter discontinued operations.
FIS shares fell 52 cents to $32.76 in light morning trading. The stock has changed hands between $13.32 and $35.75 in the past 52 weeks.