Stamford, CT – Webster Financial Corporation (NYSE: WBS) recently announced that its principal bank subsidiary Webster Bank, N.A. has signed a definitive agreement to acquire Ametros Financial Corp, a custodian and administrator of medical funds from insurance claim settlements, from funds managed by Long Ridge Equity Partners.
Ametros, the nation’s largest professional administrator of medical insurance claim settlements, helps individuals manage their ongoing medical care through their CareGuard service and proprietary technology platform. CareGuard provides settlement advisory support, saves its members money on medical expenses, ensures compliance with government reporting, and facilitates the navigation of the complex U.S. healthcare system.
The acquisition of Ametros will provide a fast-growing source of low-cost and long-duration deposits, provide new sources of noninterest income, and enhance Webster’s healthcare financial services expertise. As of December 2023, Ametros has over 24,000 members and $804 million in deposits under custody, which will become deposits of Webster following the closing of the transaction; deposits under custody have more than doubled over the past three years and the average deposit balance per account was $33,000.
Ametros’ deposit characteristics provide a unique value to Webster:
- Average cost of less than 10 basis points with near-zero beta;
- Average duration of more than 20 years;
- Member accounts receive FDIC insurance coverage; and
- Deposits are projected to grow at a five-year CAGR of approximately 25%.
“This acquisition closely aligns with our strategic focus on building a diverse and unique funding base,” said John Ciulla, President and Chief Executive Officer of Webster Financial Corporation. “Ametros’ market position and value proposition for its clients and partners underpin a robust growth trajectory for this highly complementary business. Ametros builds on Webster’s history of developing non-traditional deposit verticals with a favorable financial profile, including HSA Bank and interLINK.”
“Webster is the perfect growth partner for our unique business,” says Ametros’ CEO, Porter Leslie. “We are thankful for our clients and members who continue to place their trust in us and are excited for this next phase of growth together.”
Webster will acquire Ametros for $350 million in cash, subject to customary adjustments. The acquisition is anticipated to be over 2% accretive to FY25 consensus estimates, generate an IRR over 25%, and has a five-year earn-back of tangible book value dilution. Upon the close of the transaction, Ametros will operate as a subsidiary of Webster. The transaction is expected to close in the first quarter of 2024, subject to the satisfaction of customary closing conditions and anti-trust review. Webster was advised by Wachtell, Lipton, Rosen & Katz. Ametros and Long Ridge were advised by Choate, Hall & Stewart LLP.