Wright Express Corp.
) announced an agreement to acquire Fleet One - a fuel cards and
fleet management information services provider - from private
equity firms, LLR Partners and FTV Capital. The company will pay
$369 million in cash for the purchase, which will be funded using
its existing credit facility.
The acquisition is expected to culminate in the fourth quarter
of 2012, subject to approval from regulatory bodies as well as
other customary closing conditions. Merrill Lynch, a unit of
Bank of America Corporation
) acted as Wright Express' financial advisor for the deal, while FT
Partners was the same for Fleet One.
The adjusted net income, excluding one-time charges, of Wright
Express is expected to increase immediately following the takeover.
Moreover, the company is anticipated to gain $100 million in
present value of tax benefits due to the deal.
The acquisition will 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 at present. These cards are accepted at 60,000
locations, out of which 6,700 are over-the-road locations.
The purchase deal will also enhance Wright Express' operating
scale. Further, it will help the company to venture into the U.S.
and Canadian heavy truck markets, where Fleet One has a strong
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. Recently,
the company announced the acquisition of a 51% stake in UNIK S.A. -
a privately-held payroll cards provider based in Brazil - for a
consideration of 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 million).
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
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WRIGHT EXPRESS (WXS): Free Stock Analysis
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