Francisco Partners picks up benefits software provider bswift from CVS Health

Francisco Partners, an investment firm, signed a definitive agreement to acquire bswift from CVS Health.

As a part of CVS Health since 2018, bswift expanded its capabilities as a provider of software and services that streamline benefits and human resources administration. Bswift will continue to partner with CVS Health and its subsidiary Aetna, an insurance provider, by sharing benefits solutions with its employees and clients.

Financial terms of the deal have not been divulged. Subject to the fulfillment of standard closing conditions, Francisco Partners’ acquisition is slated to be completed by the end of the year.

“CVS Health and Aetna remain committed to bswift and to the clients, partners and members we support in benefits administration,” said Mark Santos, vice president of diversified commercial solutions at Aetna, in a press release. “FP’s deep expertise in technology and proven track record in nurturing and growing technology businesses will enable bswift’s loyal base of employees to continue delivering innovative solutions.”

Before becoming part of CVS Health, bswift was acquired by CVS company Aetna in 2014 to the tune of $400 million. Since its founding in 1996, the software provider has helped partners and employers streamline administration, handle employee benefits, decrease administrative costs and connect employees with resources.

The global benefits administration software market size is estimated to have been worth $887 million in 2021, according to a report by Proficient Market Insights. The market is expected to expand to $1.2 billion by 2027. Market growth is partially due to the COVID-19 pandemic, the report noted. Bswift was listed as one of the industry's "top players."

“We appreciate CVS Health’s work in growing this business and are confident that our partnership will help bswift drive crucial focus in executing on organic and inorganic growth strategies,” said Anders Mikkelsen, vice president at Francisco Partners, in a press release. “We look forward to supporting the talented employees and management team.”

Francisco Partners concentrates on partnering with technology and technology-enabled businesses and has raised roughly $45 billion in capital to date. It stands apart as an active and seasoned investor in tech with 20 years of investment in over 400 technology companies under its belt.

Highlights of the firm's acquisitions include Availity, eSolutions, Capsule, GoodRx, Landmark, QGenda, Trellis and Zocdoc.

The investment firm boasts previous experience in healthcare and technology markets along with experience negotiating divisional carve-outs such as acquiring Discovery Inc.’s Discovery Education business and IBM’s Watson Health business, now Merative.

“We are excited to partner with bswift and help the team continue to grow its robust technology and service offerings across benefits and healthcare,” said Justin Chen, partner at Francisco Partners, in a press release. “bswift is uniquely positioned as a market leader to help employers navigate the evolving industry trends and opportunities to holistically engage employees through health, wellness and financial benefits.”

Francisco Partners closed with the data analytics company now known as Merative in July after announcing the acquisition in January. While terms were not disclosed, IBM had been looking at deals in the $1 billion range.