Optum acquisition not near-term threat to HealthEquity, says BofA

BofA notes that UnitedHealth (UNH), announced that the company entered into a definitive agreement to acquire Alegeus Technologies, an adjunct competitor to HealthEquity (HQY). Alegeus offers a white-labeled SaaS-based benefits administration platform for consumer-directed healthcare accounts and supports over 75k employers and more than 10M members. BofA has a mixed initial view on the deal. On the one hand, it could be a modest negative to HealthEquity in that a key large competitor appears to be refocusing efforts in improving the HSA/benefits administration platform. On the other hand, UnitedHealth’s HSA business has been limited to its own health plans and adding Alegeus could result in some churn from non-UnitedHealth plans. While the firm anticipates that Optum’s benefits administration platform will improve by way of this acquisition, it’s unlikely to materially bend the competitive landscape in the near-term.