Alight Completes Sale of Payroll and Professional Services Business

Alight announced that it has closed the previously announced sale of its Professional Services segment and its Payroll & HCM Outsourcing businesses within the Employer Solutions segment to an affiliate of H.I.G. Capital. The sale of the Payroll & Professional Services business, which will operate as an independent business and has been renamed Strada, includes a transaction value of up to $1.2B, in the form of upfront gross proceeds of $1B in cash and up to $200M in seller notes, of which $150M is contingent upon Strada reaching certain 2025 financial targets, which are substantially in line with current performance levels. As previously discussed, the company anticipates using the majority of its initial net proceeds to reduce its debt, resulting in a pro forma net leverage ratio of below three times. The remaining proceeds and future cash flow generation are expected to be used for share repurchases and for general corporate purposes. “Today’s announcement represents a strategic milestone that will accelerate Alight’s transformation toward a simplified and focused platform company for employee wellbeing and benefits. I am pleased with the tremendous collaboration across both organizations 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 organizations and their valued employees,” said Chief Executive Officer Stephan Scholl. Alight expects to disclose its historic pro forma results for the continuing business four days after the completion of the transaction. In conjunction with the disclosure, Alight will post a webcast to the Events and Presentations section of the company’s Investor Relations website at 8:30 a.m. ET on July 18, the company stated.