Alight, a cloud-based human capital technology and services provider, has completed the previously announced sale of its payroll and professional services business to an affiliate of H.I.G. Capital for up to $1.2bn.
The deal included Alight’s professional services segment and its payroll and human capital management (HCM) outsourcing businesses within the employer solutions segment.
Currently, the payroll and professional services business is operating as an independent business and has been renamed Strada.
The consideration of the deal included upfront gross proceeds of $1bn in cash and up to $200m in seller notes. Of this amount, $150m is contingent upon Strada achieving specific 2025 financial targets that align with current performance levels.
Alight intends to utilise the majority of its initial net proceeds to reduce its debt, resulting in a pro forma net leverage ratio of below three times.
The cloud-based human capital technology and services provider stated that the rest of the proceeds and future cash flow generation are anticipated to be used for repurchasing shares and general corporate purposes.
Through the deal, Alight intends to transform into a more simplified and focused employee wellbeing and benefits platform company.
The company had developed a platform called Alight Worklife to help clients improve employee engagement and achieve cost savings through advanced solutions.
By concentrating resources on strengthening its platform, service capabilities, and go-to-market strategy, Alight seeks to enhance its ability to deliver improved cost, experience, and productivity outcomes for its clients.
Alight CEO Stephan Scholl said: “I am pleased with the tremendous collaboration across both organisations in accomplishing this pivotal transaction and commencing our strategic partnership with substantial momentum while preserving our client value proposition.
“Together, we will continue to keep our clients front and center, delivering improved cost, experience and productivity outcomes for organisations and their valued employees.”
