News

WEX To Buy EFS For $1.4 Billion

WEX Inc., the corporate payments company, will buy Electronic Funds Source LLC from Warburg Pincus, the private equity firm, in a deal worth as much as $1.4 billion.

The Wall Street Journal reported on Monday (Oct. 19) that under the terms of the agreement, WEX will pay $1.1 billion in cash, along with an issuance of 4 million shares of common stock, which brings Warburg Pincus and some of its affiliated funds to become the largest shareholders of WEX.

In addition, under the terms of the merger, Jim Neary, who is a Warburg Pincus managing director, will be joining WEX’s board upon the completion of the deal.

As noted by The Journal, WEX, operating in both fleet payment and non-fleet payment solutions, has been hit by a slowdown in transaction growth. In an illustration of the impact that commodity prices have had on the company, WEX said that for its most recent quarter, profits were down 39 percent year over year to roughly $26.5 million, a decline that comes on the heels of a guidance cut seen over the summer.

The deal will help shelter the company from the vagaries of energy, and specifically, fuel prices and will also be immediately accretive to earnings upon consummation. In other deal making activity, WEX last week announced an $80 million acquisition to buy Benaissance, thus pushing further into the health care payments industry.

[bctt tweet="The deal will help shelter the company from the vagaries of energy, and specifically, fuel prices"]

In recent WEX news, late last month the company said it had inked a deal to have its cards accepted at BP fuel stations. Those cards feature security and PIN tracking. The company also said over the summer that it had launched its Insight Fleet Card, which is a corporate fueling card that has features such as global positioning system technology, according to an August report.

 

To check out what else is HOT in the world of payments, click here.

 

——————————

LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

TRENDING RIGHT NOW