State Bankshares, the parent company of Bell Bank, is selling its Discovery Benefits subsidiary for $425 million.
Discovery Benefits, a Fargo-based administrator of consumer-directed benefits, will become part of Wex Inc., a provider of payment processing and business solutions based in South Portland, Maine.
Michael Solberg — president and CEO of Bell Bank and vice chairman of parent company State Bankshares, both also based in Fargo — said in a statement that Bell Bank is not part of the deal and not for sale.
Bell Bank, one of the largest independently owned banks in the country, has been expanding aggressively in the Minnesota market, and has also been growing in Wisconsin, Arizona and New Mexico.
Bell Bank employs more than 500 people in the Twin Cities.
Discovery Benefits helps manage consumer-directed benefits such as health savings accounts and commuter benefit programs.
The company has grown rapidly, from seven employees 15 years ago to 900 today.
Discovery has been a part of the Wex partner network, and the two have been working with each other for the last 10 years. State Bankshares will maintain a 5 percent equity interest in the combination of Discover Benefits and Wex's health division.
"The acquisition of [Discovery Benefits], an organization that has been a longtime WEX partner, will enable us to scale our investment in our health care financial technology platform and offer more comprehensive solutions," said Jeff Young, president of health services for Wex, in a statement.
The deal is expected to close in the first quarter.
"I'm extremely proud of the people at Discovery Benefits and the growth they've achieved," said Bell Bank's Solberg. "I'm excited for our continued investment and role with Wex moving forward."