Investment Bolsters Balance Sheet and Accelerates Transformation of Industry-Leading, AI-driven Benefits Platform
Benefitfocus, Inc., the technology platform driving rapid innovation for employers, health plans and consumers, announced it has closed the previously announced $80 million preferred stock investment from BuildGroup LLC. BuildGroup is an operator-led, permanent capital investment company for enhanced software-as-a-service (SaaS) business models.
In conjunction with the closing, the Benefitfocus Board appointed Lanham Napier as its lead independent director. Mr. Napier has served as a company director since 2014. He is Co-Founder and CEO of BuildGroup and was previously the CEO of Rackspace, which he helped grow from a startup to $1.5 billion in revenue and a global leader in the managed hosting industry. During this growth period Mr. Napier was recognized by Forbes as one of America’s Most Powerful CEOs 40 and Under and was named one of the Top 100 Most Influential Executives by CRN.
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Ray August, President and CEO of Benefitfocus, commented, “This investment is very exciting news for Benefitfocus and all of our stakeholders. Lanham has been an active member of our board and BuildGroup’s financial commitment and business expertise will further accelerate our full potential as the benefits industry’s leading SaaS platform with a growing AI-driven marketplace. In addition, this transaction substantially enhances our financial flexibility and we have never been better positioned to deliver on our mission to improve lives through personalized, consumer-focused benefits.”
As previously announced, the company intends to use the proceeds from the investment to accelerate ongoing initiatives, including the potential reduction of debt, potential acquisitions to extend the company’s market or technology leadership and other general corporate purposes. Further details of the preferred stock and related agreements will be filed on Form 8-K with the Securities and Exchange Commission today.
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Mr. Napier said, “Through my board service over the past six years I have developed a deep appreciation for the opportunity Benefitfocus has to lead its market. We believe our investment, coupled with our team’s operational expertise, will help the company monetize the strong recurring revenue of its SaaS offerings with a marketplace that leverages artificial intelligence. For the over 25 million lives on the Benefitfocus platform, this translates into high performance benefits plans and reduced healthcare costs.”
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