WEX Inc. has completed its pending acquisition of Evolution1, a cloud-based technology and payment solutions firm in the healthcare industry, the company said Wednesday.
North Dakota-based Evolution1 is now a wholly-owned subsidiary of WEX, a payment-processing firm based in South Portland.
WEX officials said in June that they had made a commitment to purchase Evolution1 for $532.5 million in cash.
The acquisition marks another step in WEX’s ongoing diversification efforts after years of focusing exclusively on fuel payment solutions for companies with fleets of vehicles. Over the past few years, WEX has begun offering payment-processing technology to health insurance providers and travel-related websites such as Expedia.com.
The purchase of Evolution1 puts WEX in the business of offering payment-processing systems for the consumer side of the health care industry, where there’s the potential to capture $1 billion in annual revenue, company President and CEO Melissa Smith has said.
Evolution1 develops software that employers can use to make and track payments to health care providers, such as from an employee’s flexible spending account.
It licenses the technology as a “white label” product to insurance providers, financial firms, payroll companies and others. White label means the licensees can put their own brands on the technology and resell it as a service to their customers.
The Evolution1 deal is the latest in a number of acquisitions WEX has made over the past few years. In 2013, it acquired the Fleet One fuel card company for $369 million. Other recent deals include buying 51 percent of UNIK SA, a Brazilian provider of payroll cards, for roughly $21.9 million, and paying about $27.5 million in cash for CorporatePay, a London-based provider of corporate prepaid cards for the travel industry.
Still, Evolution1 is by far the largest company WEX has chosen to acquire, with projected 2014 revenue of $80 million, according to Smith. WEX will use cash on hand and an existing line of credit to complete the purchase, she said.
WEX’s client base also has been growing. The company said Tuesday that it has signed an agreement with Shell Oil Co. to process prepaid fuel card transactions for the petroleum giant’s commercial fleet operations in Europe and Asia.