(Bloomberg) -- Epassi Group, a digital employee benefit payments company backed by TA Associates and Warburg Pincus, is buying Exercite, a provider of corporate health and wellness benefit solutions from Waterland Private Equity.

The transaction gives the combined firm an enterprise value of more than $1 billion, people familiar with the matter said, asking not to be identified discussing confidential information.

The corporate health and wellness sector is rapidly expanding as companies struggle to attract and retain top talent in an increasingly competitive market. 

The deal will help Epassi expand into Germany and the Netherlands, adding health and wellness network brands such as Hansefit, Bedrijfsfitness Nederland, Workit and Fitbase, according to a statement Tuesday. The brands provide access to gyms, fitness studios, swimming pools, spa services and physiotherapist centers to more than 2.5 million employees, besides digital offerings in mindfulness, sports and wellbeing.

Volatile public markets and a more difficult financing environment at a time of interest rate raises have complicated dealmaking for private equity firms. That’s led them to explore more innovative ways to get transactions across the line. 

TA Associates and Warburg Pincus also said Tuesday they completed their purchase of a majority stake in Epassi from Bregal Milestone, announced in August. Warburg Pincus this year hired a top M&A banker, Andrew Sibbald from investment bank Evercore Inc. to co-run its European operations.

Both TA Associates and Warburg Pincus have managed to raise large funds in a difficult market. TA raised $16.5 billion for its flagship fund this year, while Warburg Pincus took in $17.3 billion for its global private equity fund. 

The combined Epassi-Exercite will serve about 20,000 companies across Finland, Sweden, Italy UK and Ireland, besides Germany and Netherlands.

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