Acquisition Expected to be Immediately Accretive to Earnings Upon
Closing
NORCROSS, Ga.--(BUSINESS WIRE)--Mar. 15, 2016--
FleetCor Technologies, Inc. (NYSE: FLT) announced today that it has
signed a definitive agreement to acquire Serviços e Tecnologia de
Pagamentos S.A. (“STP”), from a shareholder group including
concessionaires CCR S.A. and Arteris S.A., Raizen Combustiveis S.A. (a
joint venture between Shell and Cosan), and others, for approximately
$1.05 billion USD1.
STP, which operates under the brand Sem Parar, is Brazil’s leading
electronic toll payments company, with near universal acceptance
nationally. Using RFID technology, STP-issued tags and stickers process
approximately $2.5 billion USD in toll, parking, and fuel payments
annually for over 4.5 million active users. STP also provides cardless
fuel payments at an expanding number of Shell sites throughout Brazil.
The company has approximately 2,200 employees and is headquartered in
Sao Paulo, Brazil.
“We have followed STP’s growth and development for many years and are
excited today to announce this transaction,” said Ron Clarke, chairman
and chief executive officer of FleetCor Technologies, Inc. “We believe
that the acquisition will result in substantial synergies as we
implement our operating disciplines and consolidate with our other
Brazil lines of business.”
Transaction Details
The transaction price is denominated in Reals and is stated in the
agreement at R$4.086 billion BRL, which is subject to adjustment through
closing. We anticipate the price at closing will be approximately R$4.2
billion BRL, which is approximately $1.05 billion USD1.
FleetCor will finance the acquisition using a combination of existing
cash and borrowings under FleetCor’s existing credit facility. The
Company expects the acquisition to close in the third quarter of 2016,
subject to regulatory approval and the satisfaction of customary closing
conditions.
“We expect the acquisition to be accretive to earnings in 2016, in the
range of $0.10 – 0.13 USD depending on timing of close. While our
financial leverage will increase, we expect to de-lever quickly from the
combined cash flow of the businesses,” said Eric Dey, chief financial
officer of FleetCor Technologies, Inc. “Following the completion of the
acquisition, we will have sufficient liquidity for future corporate
development as well as share repurchases.”
Rationale
The acquisition of STP will provide:
-
Immediate cash EPS accretion, with long term EPS growth potential
-
Enhanced scale in Brazil to support our broader ambitions in workforce
payments
-
An innovative, cardless fuel payments solution with FleetCor's global
partner, Shell
Conference Call
The Company will host a conference call today at 9:00AM ET to discuss
the acquisition. The conference call can be accessed live over the phone
by dialing (877) 407-0784, or for international callers (201) 689-8560.
The company has posted a presentation that it intends to use during the
conference call, which will also be available on the “Investor
Relations” page of the company’s website.
A replay will be available one hour after the call and can be accessed
by dialing (877) 870-5176 or (858) 384-5517 for international callers;
the conference ID is 13633024. The replay will be available until March
22, 2016. The call will be webcast live from the company's investor
relations website at investor.fleetcor.com.
1 FX of 4.00:1.00 BRL:USD used throughout the press release.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. Statements that are not
historical facts, including statements about FleetCor's beliefs,
expectations and future performance, are forward-looking statements.
Forward-looking statements can be identified by the use of words such as
"anticipate," "intend," "believe," "estimate," "plan," "seek,"
"project," "expect," "may," "will," "would," "could" or "should," the
negative of these terms or other comparable terminology. Examples of
forward-looking statements in this press release include statements
relating to the anticipated consummation of the acquisition, its
accretiveness to earnings, operating synergies, and its impact on future
opportunities and long-term grown in electronic toll payments, and the
impact on our liquidity. These forward-looking statements are subject to
a number of risks and uncertainties that could cause actual results to
differ materially from those contained in any forward-looking statement,
such as failure to complete, or delays in completing, this acquisition
or other anticipated new partnership arrangements or acquisitions;
failure to successfully integrate or otherwise achieve anticipated
benefits from this acquisition or other partnerships or acquired
businesses; the impact of foreign exchange rates on acquisition prices,
operations, revenue and income; fuel price and spread volatility;
changes in credit risk of customers and associated losses; the actions
of regulators relating to payment cards or resulting from
investigations; failure to maintain or renew key business relationships;
failure to maintain competitive offerings; failure to maintain or renew
sources of financing; the effects of general economic conditions on
fueling patterns and the commercial activity of fleets, as well as the
other risks and uncertainties identified under the caption "Risk
Factors" in FleetCor's Annual Report on Form 10-K for the year ended
December 31, 2015, filed with the Securities and Exchange Commission on
February 29, 2016. FleetCor believes these forward-looking statements
are reasonable; however, forward-looking statements are not a guarantee
of performance, and undue reliance should not be placed on such
statements. The forward-looking statements included in this press
release are made only as of the date hereof, and FleetCor does not
undertake, and specifically disclaims, any obligation to update any such
statements or to publicly announce the results of any revisions to any
of such statements to reflect future events or developments.
About FleetCor
FleetCor is a leading global provider of fuel cards and workforce
payment products to businesses. FleetCor's payment programs enable
businesses to better control employee spending and provide
card-accepting merchants with a high volume customer base that can
increase their sales and customer loyalty. FleetCor serves commercial
accounts in North America, Latin America, Europe, and Australia/New
Zealand. For more information, please visit www.FLEETCOR.com.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160315005537/en/
Source: FleetCor Technologies, Inc.
FleetCor Technologies, Inc.
Investor Relations
770-729-2017
investor@fleetcor.com
