Fleetcor Technologies, Inc. (FLT) to Acquire Cambridge Global Payments for $675M
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FLEETCOR Technologies, Inc. (NYSE: FLT) signed a definitive agreement to acquire Cambridge Global Payments, a leading B2B international payments provider.
Cambridge, founded in 1992, processes over $20 billion in B2B cross-border payments annually, helping 13,000 business clients make international payments to suppliers and employees. Cambridge’s proprietary technology serves the needs of SMB and mid-cap businesses, enabling its clients the flexibility of making wire, EFT, draft and check payments in over 140 currencies. Cambridge is headquartered in Toronto, Canada.
“We have followed the international payments market for several years and are excited to announce the acquisition of a global leader in the industry,” said Ron Clarke, chairman and chief executive officer of FLEETCOR Technologies, Inc. “We like the strategic fit with Cambridge as they focus on international AP payments while FleetCor, via Comdata, focuses on domestic AP payments. Given that all of Cambridge’s customers have domestic AP to pay, we believe the acquisition will result in substantial synergies by integrating Comdata’s domestic AP automation and virtual card solutions into Cambridge’s client base. Moreover, we believe that this global (domestic and international) AP automation capability will differentiate FleetCor’s solution in the marketplace to deliver a more holistic global AP solution.”
“We are excited to join the FLEETCOR team. This is the right fit and a natural evolution of our business. FLEETCOR brings synergistic corporate payment products, access to a much greater global footprint, and deep pockets that will allow Cambridge to accelerate its growth trajectory,” said Gary McDonald, chief executive officer of Cambridge.
The acquisition of Cambridge is expected to provide the following benefits to FLEETCOR:
1. Immediate cash EPS accretion, with long-term EPS growth potential
2. Provides entry into the B2B cross-border payments market, a $145B global revenue market opportunity
3. Enhanced global corporate payments capabilities, enabling FLEETCOR to pay both domestic and international AP payments for the same client
The transaction price is approximately $675 million, which will be financed using a combination of existing cash and borrowings under FLEETCOR’s existing credit facility. The transaction is expected to close in the third quarter of 2017, subject to regulatory approval and the satisfaction of customary closing conditions.
“We expect the acquisition to be accretive to earnings in 2017 and our financial leverage will approximate 2.9x post-close,” said Eric Dey, chief financial officer of FLEETCOR Technologies, Inc.
Alston & Bird LLP served as legal counsel to FLEETCOR. Morgan, Lewis & Bockius LLP served as legal counsel to Cambridge, and Financial Technology Partners (FT Partners) served as exclusive strategic and financial advisor to Cambridge.
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