HealthEquity Inc. (NASDAQ:HQY) made a proposal to acquire WageWorks Inc. (NYSE:WAGE) for approximately $2 billion on April 11, 2019. HealthEquity will pay $50.5 per share in cash as consideration under the proposal. HealthEquity Inc. (NASDAQ:HQY) entered into a definitive agreement to acquire WageWorks Inc. (NYSE:WAGE) for $2.1 billion on June 26, 2019. HealthEquity will acquire all of the issued and outstanding shares of common stock of WageWorks for $51.35 per share in cash. HealthEquity will finance the transaction from offering $411.75 million of its common stock at a public offering price of $61, committed debt financing and cash on hand of $296 million. HealthEquity has received from Wells Fargo Bank a debt commitment to finance the acquisition. HealthEquity has entered into a commitment letter on June 26, 2019, where Wells Fargo Bank, National Association and Wells Fargo Securities, LLC have committed to provide $200 million senior secured revolving credit facility, $1,410 million senior secured term loan facility and a $300 million senior unsecured bridge facility to fund the consideration for the Merger. As on July 12, 2019, HealthEquity entered into an amended and restated debt commitment letter pursuant to which HealthEquity will fund the transaction through a $200 million senior secured revolving credit facility and a $1,236 million senior secured term loan facility. As on August 30, 2019, HealthEquity entered into a credit agreement with the lenders, Wells Fargo Bank, N.A., as administrative agent, pursuant to which, HealthEquity established a five-year senior secured term loan A facility in an aggregate principal amount of $1.25 billion and a revolving line of credit of up to $350 million, the proceeds of which were used to finance the merger.

Upon termination of the Merger Agreement under certain specified circumstances, WageWorks will be obligated to pay HealthEquity a termination fee of $69.7 million. Following the transaction, WageWorks will become a wholly owned subsidiary of HealthEquity. Following the close of the transaction, Jon Kessler will serve as President and Chief Executive Officer of the combined company. The transaction is subject to WageWorks' stockholder approval, regulatory approvals, expiration of the waiting period under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions and has been unanimously approved by the Boards of Directors of both HealthEquity and WageWorks. The transaction is not subject to the availability of financing. As of July 29, 2019, the transaction has received notification of early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. On August 28, 2019, stockholders of WageWorks has provided the approval for the transaction. The transaction is expected to close by the end of 2019. As of August 27, 2019, the transaction is expected to close on August 30, 2019.

Steven Gartner, Russell Leaf and Matthew Haddad of Willkie Farr & Gallagher LLP acted as legal advisors and Perella Weinberg Partners LP and Wells Fargo Securities acted as financial advisors to HealthEquity. Robert T. Ishii and C. Derek Liu of Wilson Sonsini Goodrich & Rosati P.C. acted as legal advisors and Evercore Group L.L.C. acted as financial advisor and fairness opinion provider to WageWorks. Innisfree M&A Incorporated acted as proxy solicitor and American Stock Transfer & Trust Company, LLC acted as transfer agent to WageWorks. Innisfree has been engaged to assist in the solicitation of proxies and provide related advice and informational support for a services fee of $15,000 per month. WageWorks has agreed to pay Evercore a fee for its services in the amount of approximately $26 million, of which $0.4 million was paid as an initial fee upon execution of Evercore's engagement letter with WageWorks and $2 million was paid upon execution of the merger agreement, and the balance of which will be payable contingent upon the consummation of the merger, as well as a potential discretionary fee of $1.5 million. Ariel J. Deckelbaum of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Perella Weinberg Partners LP.