10:11 AM EDT, 03/20/2024 (MT Newswires) -- (Updates to add details after the first paragraph and the latest stock movement in the last paragraph.)

Alight (ALIT) said Wednesday it has agreed to sell its Professional Services and Payroll & HCM Outsourcing businesses to an H.I.G. Capital affiliate for up to $1.2 billion.

The company said the deal comprises $1 billion in cash and up to $200 million in seller notes, dependent on the Payroll & Professional Services business' financial performance in 2025.

Alight intends to enter into commercial partnerships with the divested business, the company said.

Alight said it now expects a mid-term adjusted earnings before interest, taxes, depreciation, and amortization margin of 28% and will update its 2024 guidance after closing the deal. The company expects the sale to add 300 basis points of adjusted EBITDA margin expansion upon deal closing, Alight added.

The company said it plans to use the proceeds from the sale, expected to close by mid-2024, to reduce debt, return capital, and invest in growth opportunities.

Alight said its board approved an additional $200 million for repurchasing its Class A common stock, bringing the total authorized repurchase amount to $248 million.

Alight was up more than 11% in recent Wednesday trading activity.

Price: 9.82, Change: +0.97, Percent Change: +11.03