Consolidation in the benefits and HR and benefits technology space is not slowing down.
In early July, human capital and benefits administration technology company Alight acquired Hodges-Mace, another employee benefits technology and communications firm which serves 500 U.S. employers and more than 1.2 million employees.
This marks Alight’s fifth acquisition since becoming a stand-alone entity in 2017, when it broke off from the insurance company Aon. The Hodges-Mace transaction will expand the company’s reach in the health services market, says Chris Michalak, CEO of Alight. The terms of the deal were not disclosed.
“Bringing Hodges-Mace into the fold will allow us to bring these health solutions to a broader set of companies, and expand upon our voluntary benefits capabilities,” he says. “In addition, Hodges-Mace’s strong relationships with consultants, brokers and carriers will strengthen Alight’s reach into the growing health services market.”
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In addition to Hodges-Mace, Michalak says Alight has acquired Future Knowledge, Compass Professional Health Services, Carlson Management Consulting and the Workday and Cornerstone on demand businesses of Wipro.
Mergers and acquisitions in the benefits and HR tech space have flourished recently. Private equity poured close to $2 billion into the market over the past two years, with more than $900 million in the first seven months of 2017, according to a report from consulting firm Hampleton. The firm reports the largest HR tech buyers in 2018 include Kronos, Bullhorn, Marlin Equity and Assure Software.
Earlier this year, insurance benefits tech provider Zywave acquired RateFactory, a small group rating engine that is directly linked to insurance carrier quoting systems. This marks Zywave’s second acquisition since October, and the company says it has plans to continue expansion.
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Alight will now have access to Hodges-Mace’s SmartBen platform, expanding its current suite of health, wealth, HCM and financial management technology. Michalak says the company plans to build a comprehensive health solution integrating enrollment, navigation, voluntary benefits, spending accounts and wellness for employers.
“Adding this platform enables Alight to serve clients of every size and complexity with a technology solution that meets the unique needs of each market segment,” he adds.
