Why Did The Benefitfocus (BNFT) Stock Soar 47% In Wednesday’s Pre-Hours Session?

Following news of a merger agreement, Benefitfocus Inc. (NASD: BNFT) increased 47.50% to $10.31 in pre-market trading hours on the latest check Wednesday.

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What merger agreement has BNFT entered?

Benefitfocus (BNFT) stated that it has signed a legally binding agreement to be acquired by Voya Financial, Inc. (NYSE: VOYA), a renowned health, wealth, and investing firm. In accordance with the terms of the agreement, Voya will buy all of the outstanding shares of Benefitfocus common stock for $10.50 each in an all-cash deal estimated to be worth $570 million when BNFT debt and outstanding preference shares are also included.


More than 25 million people’s lives are impacted by BNFT’s technology, which it uses to service the top brokerage and consulting companies in the health and benefits sector. After the transaction is complete, Voya will now serve over 38 million people, or nearly one in ten Americans, when combined with its own current workplace clients.

Voya has an excellent opportunity to accelerate its workplace-centered strategy and boost its ability to fulfill the expanding demand for complete benefits and savings solutions at the workplace with the purchase of Benefitfocus. Voya will be better able to deliver creative solutions for employers and health plans and contribute to the improvement of the financial, physical, and emotional well-being of their employees and members thanks to BNFT’s exceptional talent, strong capabilities, and wide-ranging reach across the benefits industry.


Financial Terms and Highlights

The acquisition is anticipated to be immediately accretive, on a cash basis, to Voya’s adjusted operating earnings per share relative to buybacks and before any future revenue synergies are taken into account. This is in addition to its strong strategic advantages. The deal, which represents a purchase price premium of about 49% over BNFT’s closing stock price as of October 31, 2022, was unanimously endorsed by the company’s board of directors. It is anticipated to close in the first quarter of 2023, subject to the usual closing conditions, including shareholder approval of Benefitfocus.

Benefits of transactions for intermediaries and clients

The freedom of choice that companies and their intermediary partners already enjoy when deciding on the best benefit alternatives for their employees and clients must be preserved and expanded, according to Voya. With continuity in the current Benefitfocus (BNFT) management team and a confirmed commitment to its broker, adviser, and carrier relationships, BBNFT will function as a separate business under Voya’s ownership.

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