SAPGF - Alight Inc. Is Preparing To Ignite A New Spark After Spin-Out Deal

2024-04-20 07:09:50 ET

Summary

• Alight, Inc. has sold its professional services and payroll outsourcing business for $1.2 billion to HIG Capital, which will strengthen its revenue margins and visibility in the labor employment market.
• Alight's main revenue sources are employer solutions and professional/payroll services, with employer solutions accounting for 87% of gross profit in Q4 2023.
• The deal with HIG Capital is expected to be finalized in H2 2024, and Alight plans to use the proceeds for debt repayment, reinvestment, and share buybacks.

Cloud-based human resource technology firm, Alight, Inc. ( ALIT ) announced the sale of its “professional services and payroll outsourcing business” segment for $1.2 billion to “an affiliate of private equity company, HIG Capital.” The stock has risen just 5.33% (YTD) and 32.11% in the last 6 months indicating a minor positive impact of the divestment on the growth in the stock's price. In this article, I will explain why Alight is a buy due to the sale of its less profitable professional outsourcing business as it will strengthen its revenue margins and grow its visibility within the labor employment market in the long run....

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