March 20 (Reuters) - Alight said on Wednesday

it has agreed to sell its professional services and payroll

outsourcing business to an affiliate of private equity firm HIG

Capital for up to $1.2 billion.

Shares of the benefits service provider rose around 10%.

The deal is in the form of $1 billion in cash and up to $200

million in seller notes, of which $150 million is contingent

upon the payroll and professional segment's 2025 financial

performance.

"This strategic transaction results in a more agile Alight

and enhances our competitiveness as we strengthen our

technology," said CEO Stephan Scholl.

Alight was the target of activist hedge fund Starboard Value

last month as it built a 7.8% stake in the company and nominated

four people to its board to push for changes.

Alight helps businesses, including many major companies,

manage health benefits for employees and offers payroll

solutions.

The transaction has been approved by Alight's board and is

expected to close by mid-2024. The company also expects to

update its full-year 2024 financial forecast after the sale

closes.