Recently, global fuel card and workforce payment provider
FleetCor Technologies Inc.
) declared a series of acquisitions undertaken and announced over
the past one month in Brazil.
The acquisition of a leading provider of transportation cards and
vouchers VB Servicos, Comercio e Administracao LTDA (VB) on Aug
9, 2013 is the first on the list. Later on Aug 26, 2013, the
company signed an agreement to acquire DB Trans S.A. (DB), a
leading Brazilian payment solution provider who caters to the
independent truckers in Brazil.
On Sep 5, 2013, FleetCor inked a marketing deal with a leading
Brazilian fuel card network operator Good Card. This deal
pertained to FleetCor's intentions to issue fuel cards operating
in Good Card's merchant acceptance network in Brazil.
The acquisition of DB is expected to culminate in the third
quarter of 2013, and is subject to customary closing conditions.
FleetCor expects to acquire DB and Good Card for an aggregate
purchase consideration of $300 million, part of which will be
paid in cash and the rest by borrowings under FleetCor's
revolving credit facility.
The above acquisitions will help FleetCor tap the growth
opportunities in the Brazilian market. With all these
acquisitions FleetCor will be able to deliver a wide array of
goods in the Brazililan market starting from transportation and
fuel cards to food.
For instance through the acquisition of VB, FleetCor aims to
enhance its customer base as VB caters to more than 35000
business clients, nearly one million employees, and around 800
transportation agencies across the country. Additionally it also
markets food cards through its association with Ednerd.
Again through the DB acquisition, FleetCor is focused to offer
its products to the Brazilian transportation market, in turn
generating higher revenues from the same. Last but not least the
acquisition of Good Card, which has acceptance in almost 40% of
Brazil's gas stations, is expected to help FleetCor to issue a
comprehensive fuel card program to the small and medium
enterprises in Brazil.
FLEETCOR TECH (FLT): Free Stock Analysis
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FleetcCor currently carries a Zacks Rank #1 (Strong Buy). Among
other payment providers,
Financial Engines Inc.
SS&C Technologies Holdings Inc.
Global Cash Access Holdings Inc.
) carry a Zacks Rank #2 (Buy).