Voya Financial (NYSE:VOYA) announced the acquisition of Benefitfocus (NASDAQ:BNFT), a cloud-based benefits management platform, for $10.50 a share in an all-cash deal (total transaction value of approximately $570 million). This includes Benefitfocus’ debt and outstanding preferred shares.
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Voya Financial offers wealth solutions, investment management, and health solutions. The acquisition of Benefitfocus will strengthen Voya’s benefits administration capabilities and support its health and wealth solutions business.
Further, Voya expects the BNFT deal to be immediately accretive to its adjusted operating EPS. Moreover, the transaction will close in Q1 of 2023.
It’s worth highlighting that Voya’s transaction price reflects a premium of about 49% to BNFT’s closing price on October 31. Investors’ reaction to this purchase price premium is yet to be seen and would be critical to Voya stock’s future trajectory.
In response to the deal, Wells Fargo analyst Elyse Greenspan said that the transaction overshadowed VOYA’s Q3 earnings beat (it delivered adjusted EPS of $2.30 compared to analysts’ estimate of $1.08). The analyst added, “We expect VOYA to pause its buyback program until Q2 2023 until after the deal has closed, when we expect it to resume repurchases coinciding with corresponding debt management.” Greenspan has a Buy recommendation on VOYA stock.
Is VOYA Stock a Good Buy?
VOYA stock has a Strong Buy consensus rating on TipRanks based on eight Buy and one Hold recommendations. VOYA’s average price target of $77.22 implies 12.71% upside potential. Its strong organic growth, margin expansion, and capital management initiatives will likely cushion its earnings.
However, VOYA stock has a Smart Score of six out of 10 on TipRanks, implying a Neutral outlook.