-
Strengthens WEX’s offerings in both the over-the-road and corporate
payments market
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Provides complementary footprint and entry into the mid- and
large-sized over-the-road fleet segment
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Adds new capabilities and products to address customers’ evolving
needs
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Immediately accretive to adjusted net income
SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Oct. 19, 2015--
WEX Inc. (NYSE:WEX), a leading provider of corporate payment solutions,
today announced it has entered into a definitive agreement to acquire
Electronic Funds Source LLC (“EFS”) for a total consideration of
approximately $1.1 billion in cash and 4.0 million shares of common
stock to be issued to investment funds affiliated with Warburg Pincus,
EFS’ current owner. The acquisition is expected to be immediately
accretive to adjusted net income.
“We are very excited about the prospect of combining these two great
companies, which have a strong customer orientation, aligned strategy
and a complementary footprint,” said Melissa Smith, WEX’s president and
chief executive officer. “We believe this acquisition strengthens our
value proposition to customers with a portfolio of best-in-class
offerings that will better meet their evolving needs. Additionally, we
have the opportunity to draw on the strengths of both companies to drive
further scale across the organization, enhance our existing
over-the-road business, better serve the needs of mixed fleets and
improve the functionality and service we provide to our customers. We
look forward to welcoming EFS to WEX and are confident that this
combination will deliver long-term value for our shareholders.”
Combination Benefits
EFS’ strong track record and broad customer acceptance in mid- and
large-sized over-the-road (“OTR”) fleet segments is an ideal complement
to WEX. The combined company would serve the needs of all sizes and
types of fleets by drawing on strengths from both companies’ offerings
to provide a more efficient, more comprehensive and better-integrated
solution to all customers.
EFS’ sophisticated OTR platform adds important functionality in
controls, permitting, fuel price analytics, mobile account maintenance
and strong acceptance in Canada. Furthermore, WEX and EFS have focused
on different parts of the corporate payments spectrum, which will allow
customers to benefit from the combined company’s more diverse set of
capabilities. For WEX customers, this includes the addition of a variety
of corporate card options, including a single, multi-purpose card.
Moving forward, the combination would deliver continuous innovation and
sector expertise to anticipate industry trends and adapt the combined
offering accordingly.
Additionally, the combination will further diversify WEX’s earnings and
help to reduce its exposure to fuel price sensitivity. WEX estimates
that approximately 16% of EFS’ revenue is exposed to fuel prices.
Scott Phillips, president and chief executive officer of EFS, stated,
“We are very pleased to be joining forces with a great organization like
WEX, which shares our focus on continued product innovation, superior
service and maintaining long-term customer relationships. I look forward
to joining the WEX organization, as this combination represents a great
match and a win-win for the employees and customers of both companies.”
Transaction Details
Upon closing the transaction, the acquisition is expected to be
immediately accretive to adjusted net income. The Company expects to
realize run-rate synergies of approximately $25 million over a three
year period, excluding one-time integration costs, and to realize
approximately $275 million in present value of tax benefits.
The transaction, which has been unanimously approved by the WEX board of
directors, is subject to regulatory approvals and other customary
closing conditions.
Upon closing, investment funds affiliated with Warburg Pincus will
become WEX’s largest shareholder. Warburg Pincus’ managing director and
member of the executive management group, Jim Neary, will join WEX’s
board of directors.
Mr. Neary commented, “We are excited about the future of the combined
company. We are looking forward to being a shareholder of WEX and
partnering with Melissa, Scott and the WEX team.”
BofA Merrill Lynch is acting as financial advisor and Wilmer Cutler
Pickering Hale and Dorr LLP and Weil, Gotschal & Manges are acting as
legal advisors to WEX. Cleary Gottlieb Steen & Hamilton LLP is acting as
legal advisor to EFS.
Conference Call Details
In conjunction with this announcement, WEX will host a conference call
today, October 19, at 8:30 a.m. (ET). The conference call will be
webcast live on the Internet and can be accessed via the Investor
Relations section of the WEX website, http://www.wexinc.com.
The live conference call also can be accessed by dialing (866) 334-7066
or (973) 935-8463. The conference ID number is 64102186. A replay of the
webcast will be available on the Company's website.
About WEX Inc.
WEX Inc. (NYSE: WEX) is a leading provider of corporate payment
solutions. From its roots in fleet card payments beginning in 1983, WEX
has expanded the scope of its business into a multi-channel provider of
corporate payment solutions representing 9 million vehicles and offering
exceptional payment security and control across a wide spectrum of
business sectors. WEX serves a global set of customers and partners
through its operations around the world, with offices in the United
States, Australia, New Zealand, Brazil, the United Kingdom, Italy,
France, Germany, Norway, and Singapore. WEX and its subsidiaries employ
more than 2,000 associates. The Company has been publicly traded since
2005, and is listed on the New York Stock Exchange under the ticker
symbol “WEX.” For more information, visit www.wexinc.com
and follow WEX on Twitter at @WEXIncNews.
About EFS
EFS provides customized corporate payment solutions for fleet and
corporate customers with a focus on the large and mid-sized fleet
segments. EFS has established a proprietary network of over 14,000
accepting locations in the U.S. and Canada for the over the road (OTR)
fleet industry and services a diverse base of more than 17,000
customers. EFS has a robust product set, offering customized purchase
controls and validations, enhanced data and analytics, unique settlement
capabilities, real-time connectivity and state-of-the-art technology.
Forward-Looking Statements
This news release contains forward-looking statements, including
statements regarding: the proposed acquisition, the expected timetable
for completing the acquisition, future financial and operating results,
benefits and synergies of the acquisition, future opportunities for the
combined operations and any other statements about the Company or
Electronic Funds Source LLC managements’ future expectations, beliefs,
goals, plans or prospects. Any statements that are not statements of
historical facts may be deemed to be forward-looking statements. When
used in this report, the words “may,” “could,” “anticipate,” “plan,”
“continue,” “project,” “intend,” “estimate,” “believe,” “expect” and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such words. These
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially,
including: the ability to consummate the acquisition; the risk that
regulatory approvals required for the acquisition are not obtained or
are obtained subject to conditions that are not anticipated; the risk
that the financing required to fund the acquisition is not obtained; the
risk that the other conditions to the closing of the acquisition are not
satisfied; potential adverse reactions or changes to business or
employee relationships, including those resulting from the announcement
or completion of the acquisition; uncertainties as to the timing of the
acquisition; competitive responses to the proposed acquisition;
uncertainty of the expected financial performance of the combined
operations following completion of the proposed acquisition; the ability
to successfully integrate the Company’s and the Electronic Funds Source
LLC’s operations and employees; the ability to realize anticipated
synergies and cost savings; unexpected costs, charges or expenses
resulting from the acquisition; as well as other risks and uncertainties
identified in Item 1A of our Annual Report for the year ended December
31, 2014, filed on Form 10-K with the Securities and Exchange Commission
on February 26, 2015. The Company's forward-looking statements do not
reflect the potential future impact of any alliance, merger,
acquisition, disposition or stock repurchases, other than the
acquisition. The forward-looking statements speak only as of the date of
this report and undue reliance should not be placed on these statements.
The Company disclaims any obligation to update any forward-looking
statements as a result of new information, future events or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151019005476/en/
Source: WEX Inc.
News media:
WEX Inc.
Jessica Roy, 207-523-6763
Jessica.Roy@wexinc.com
or
Investor
relations:
WEX Inc.
Michael E. Thomas, 207-523-6743
Michael.Thomas@wexinc.com