Corporate payment provider WEX has entered into an agreement to acquire Evolution1 for $532.5 million in cash.

Evolution1 provides hosted technology and payments products that service the health care industry, such as card-based and mobile payment systems for health savings accounts, health reimbursement accounts, flexible spending accounts, voluntary employee beneficiary associations and defined contribution and wellness programs.

In 2013, Evolution1 processed more than 65 million transactions and $5 billion in payment volume. It has about 500 partners in the health plan, payroll provider and financial services industries.

WEX's primary business is fleet card payments, and it has been expanding into health care payments through moves such as its recently announced partnership with Alegeus to offer a virtual health care card.

"The acquisition of Evolution1 advances WEX’s long-term strategy to extend our scalable business model into high-growth, high-value markets with complex payment systems," says Melissa Smith, WEX’s president and chief executive, in a June 16 press release.

The transaction, which will be funded with cash on hand and WEX's credit facility, is expected to be accretive to adjusted net income in the first 12 months after close, excluding acquisition costs. WEX expects the deal to close in the third quarter.

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