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WageWorks Hits Record High Price After Stock Offering

Aug. 14 (Bloomberg) -- WageWorks Inc., the provider of human-resources services for companies, rose to the highest level since its public offering last year, after it sold shares in a follow-on offering.

The shares gained 12 percent to $45.46 at the close in New York, their highest price since the San Mateo, California-based company sold stock in May last year.

The company yesterday priced a follow-on sale by holders of about 3 million shares at $40.45 apiece, a discount to yesterday’s closing price of $40.51. The holders also granted an option for underwriters to purchase up to an additional 445,241 shares of stock to cover over-allotments.

Chief Executive Officer Joseph L. Jackson said on a conference call last week that he believes private health care exchanges related to the Affordable Care Act are expanding WageWorks’ market. The company also raised its forecast for full-year growth to 10 percent to 11 percent from a previous projection of 9 to 10 percent.

“WageWorks is one of the highest quality, highest incremental growth stocks among any remote companies that are in the same general universe of what they do,” Craig Sterling, head of equity research at EVA Dimensions, said today in an e-mail. He has a hold rating on the stock.

The company on Aug. 7 reported second-quarter sales of $54.6 million for the three months ended in June. That was ahead of the average analysts’ estimate of $52.5 million, according to data compiled by Bloomberg. Net income was $4 million, beating the $3.34 million average projection of analysts.

William Blair & Co. and Stifel, Nicolaus & Co. are joint book-running managers on the offering. WageWorks also said the company, or selling stockholders, may offer “from time to time,” up to 7.24 million shares in one or more offerings.

WageWorks shares have more than doubled this year through today.

To contact the reporter on this story: Kathleen Chaykowski in San Francisco at kchaykowski2@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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