Alight Announces Sale of Payroll & Professional Service Business Alight Solutions ( NYSE:ALIT ), a leading provider of benefits services, has announced the sale of its professional services and payroll outsourcing business. The deal, valued at up to $1.2 billion, marks a strategic shift for the company towards greater agility and technological advancement.
According to the announcement made on Wednesday, Alight ( NYSE:ALIT ) has entered into an agreement to sell its professional services and payroll outsourcing division to an affiliate of HIG Capital, a prominent private equity firm. The transaction comprises $1 billion in cash and up to $200 million in seller notes, with $150 million contingent upon the financial performance of the segment in 2025.
Following the news, shares of Alight ( NYSE:ALIT ) saw a notable surge of approximately 10%, reflecting investor optimism regarding the strategic direction of the company.
Stephan Scholl, CEO of Alight ( NYSE:ALIT ), emphasized the strategic significance of the transaction, stating, "This strategic transaction results in a more agile Alight ( NYSE:ALIT ) and enhances our competitiveness as we strengthen our technology." The move underscores Alight's commitment to leveraging technological innovation to better serve its clientele.
The decision to divest its professional services and payroll outsourcing business comes amidst increased pressure from activist hedge fund Starboard Value, which recently acquired a 7.8% stake in Alight. Starboard Value had nominated four individuals to Alight's board in a bid to drive changes within the company.
Alight Solutions ( NYSE:ALIT ), renowned for assisting businesses, including numerous major corporations, in managing employee health benefits and offering comprehensive payroll solutions, anticipates that the transaction will streamline its operations and bolster its focus on core strategic initiatives.
The transaction has received approval from Alight's board of directors and is slated to close by mid-2024. Following the completion of the sale, the company intends to revise its financial forecast for the full year 2024, reflecting the impact of the divestiture.
The sale of its payroll and professional service business signifies a pivotal moment for Alight ( NYSE:ALIT ) Solutions as it charts a course toward greater competitiveness and innovation in the evolving landscape of benefits services and payroll solutions.
