Financial technology services provider WEX Inc. agreed to acquire Discovery Benefits Inc., an employee benefits administrator, from State Bankshares Inc.
WEX will pay approximately $425 million in cash, including $50 million that will be deferred until January 2020. State Bankshares will retain about 5% of equity interest in the combination of WEX's Health division and Discovery Benefits.
Discovery Benefits was started in 2003 by Fargo, N.D.-based Bell Bank, a unit of State Bankshares.
WEX expects the acquisition to be immaterial to adjusted net income in the first year. It also expects the transaction to yield approximately $15 million in annual run-rate synergies within the first 24 months following closing of the deal and about $50 million in net present value of tax benefits.
The transaction is expected to close in the first quarter.