FIS sold its Healthcare Benefit Solutions business for $335 million in cash this week, saying it wants to focus a larger share of its resources on more traditional clients.
“FIS has built a market leading position in healthcare account processing and payment services, and this business has performed very well,” explained CEO Frank Martire in a statement announcing the deal, but added that selling the healthcare business “is consistent with [FIS’] primary focus to serve financial institutions.”
The unit being sold by FIS was reportedly profitable: FIS HBS generated $120 million in revenues in 2011, along with $34 million in EBITDA. But those numbers represent a noticeably small share of FIS’ business; the firm’s 2011 revenues were $5.7 billion.
Buyer Lightyear Capital, a New York-based private equity firm, pointed to BHS’ “market leading position” in the administering of consumer directed healthcare (CDH) accounts as rationale for the purchase. At the time of sale, the business unit served 500 clients, and serviced roughly 11 million CDH accounts.
The healthcare business unit being sold has been active in the space since 1995, when predecessor company MBI Benefits launched the first healthcare benefits debit card. In 2005, it was acquired by Metavante, which was itself acquired by FIS in 2009.