Just a month after the agreement was announced,
Wright Express Corp.
) has completed the acquisition of Fleet One - a fuel cards,
financial services and fleet management information services
provider - after obtaining necessary approvals from regulatory
bodies. Following the culmination of the purchase from private
equity firms - LLR Partners and FTV Capital - Fleet One has become
a wholly-owned subsidiary of Wright Express.
The entire purchase consideration of $369 million was paid in
cash using Wright Express' credit facility. Merrill Lynch, a unit
Bank of America Corporation
), acted as Wright Express' financial advisor for the deal, while
FT Partners was the same for Fleet One.
When the acquisition was announced in September, Wright Express
had revealed that it expected adjusted net income, excluding
one-time charges related to the acquisition, to increase
immediately following the takeover. The company also anticipated
receiving present value of tax benefits worth $100 million from the
deal. However, the company did not confirm these gains after the
conclusion of the purchase deal.
The acquisition is expected to be beneficial for Wright Express
as the local fleet and private label business of Fleet One is
complementary to its core fleet business. Thus, it will help expand
the company's fleet business in America. Moreover, Fleet One's
well-established over-the-road business is expected to not only
boost Wright Express' acceptance in Canada, but also enhance its
customer service ability toward the mixed fleet and co-branded
customers by adding to its product capabilities.
The acquisition will also significantly strengthen Wright
Express' fuel cards business as Fleet One has a strong footing in
both over-the-road and local fleet markets, with about 210,000
active cards in circulation in September 2012. These cards are
accepted at 60,000 locations, out of which 6,700 are over-the-road
locations. Further, the purchase will help the company to venture
into the U.S. and Canadian heavy truck markets, where Fleet One has
a significant presence.
Wright Express, which competes with
FleetCor Technologies, Inc.
), has been working on augmenting its fleet business and other
payment solutions to widen its international presence. In August
this year, the company announced the acquisition of a 51% stake in
UNIK S.A. - a privately-held payroll cards provider based in Brazil
- for US$21.9 million (R$44.7 million).
Wright Express also holds the option to buy the remaining 49%
stake over the upcoming three years. The acquisition marks Wright
Express' initial stride into the Brazilian market, which offers
attractive opportunities for growth.
Earlier, in May, Wright Express acquired CorporatePay - a
company that offers corporate prepaid solutions to the travel
industry in the United Kingdom - for US$27.8 million (GBP 17
Wright Express carries a Zacks #3 Rank, which translates into a
short-term Hold rating.
BANK OF AMER CP (BAC): Free Stock Analysis
FLEETCOR TECH (FLT): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
WRIGHT EXPRESS (WXS): Free Stock Analysis
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