Metavante Corp. has agreed to acquire Med-i-Bank Inc. for $138 million in stock and $7 million in other consideration.[@@]
Metavante, Milwaukee, is a financial technology company that has been selling support systems for health savings accounts and HSA-compatible health insurance plans. The company is a unit of Marshall & Ilsley Corp., Milwaukee, a publicly traded bank holding company.
MBI, Waltham, Mass., is a privately held firm that has been setting up debit card-based health account access programs since 1995, when Congress was hatching flexible spending accounts. The company now is marketing its card systems for use with health savings accounts and health reimbursement arrangements. It says 200 independent benefit plan administrators, 15,500 employers and 1.3 million consumers now use its cards.
Metavante, which hopes to complete the deal by Sept. 30, is predicting that MBI will generate about $6 million in net income in 2006.
Metavante, which bought a business that makes health insurance member cards in 2003, says it plans to operate MBI as a separate subsidiary and keep the company’s current managers.
MBI President Robert Natt says his company has agreed to the acquisition to get access to the “extensive capabilities” of a large financial services organization.
Metavante President Frank Martire says his company is making the deal because it likes the HSA market.
“Fundamentally, it is a new opportunity for banks to increase deposits,” Martire says.