Wright Express Corporation
) announced the acquisition of 51% stake in UNIK S.A., for a
consideration of US$21.9 million (R$44.7 million). UNIK S.A., is a
privately-held payroll cards provider based in Brazil.
Per the purchase agreement, the company also has an option of
buying the remaining 49% stake over the upcoming three years.
The acquisition is expected to bolster the adjusted net income in
the first year itself.
The UNIK acquisition has not only strengthened Wright Express'
global reach but also helped it foray into the Brazilian market,
which being a promising economy offers attractive opportunities.
Wright Express expects to combine UNIK's personnel and products to
capitalize on the opportunities. The acquisition is expected to
augur well for the company and help it set its foot in the fleet
market, besides strengthening its payroll card presence.
On the flip side, combining Wright Express's with UNIK's product
will help the latter widen its product offering.
Wright Express has been working on augmenting its fleet business
and other payment solutions. Revenues from fleet payment solutions
in the second quarter increased 1%, while it surged 39% from other
In order to augment its business and widen international presence,
Wright Express has made acquisitions earlier as well. In May, it
acquired CorporatePay for US $27.8 million (GBP 17 million).
CorporatePay offers corporate prepaid solutions to the travel
industry in the United Kingdom.
Wright Express delivered a very strong quarter, with both its top
line and bottom line outperforming the company's guidance. Also,
revenue and earnings per share surprised the Zacks Consensus
Estimate by 3% and 3.1% respectively.
The company expects to generate revenue in the range of $591
million to $601 million and adjusted net income in the range of
$156 million to $162 million, or $4.00 to $4.15 per diluted share
in 2012. The Zacks Consensus Estimate for 2012 is currently pegged
at $4.09, close to the mid point of the company's guidance. It also
reflects a year-over-year increase of 12.4%.
Wright Express, provider of value-based, business payment
processing and information management solutions currently holds a
Zacks Rank #3 (Hold), indicating no clear directional pressure on
the stock in the near term.
FleetCor Technologies, Inc.
), which closely compete with Wright Express, hold a Zacks Rank #1
(Strong Buy) and a Zacks Rank #2 (Buy) respectively.
FLEETCOR TECH (FLT): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
WRIGHT EXPRESS (WXS): Free Stock Analysis
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