August 13, 2014 12:10 PM, EDT
FleetCor to Buy Comdata for $3.45 Billion
John Sommers II for TT

Trucking fuel card provider Comdata Inc. has agreed to a $3.45 billion acquisition by FleetCor Technologies Inc., another provider of fuel cards, which intends to expand its North American electronic fleet payment services.

The Norcross, Georgia-based buyer said Aug. 12 the acquisition will expand its North American electronic fleet payment services.

FleetCor plans to issue $2.4 billion of new debt and pay for the rest with about 7.3 million new shares issued to Ceridian, Comdata’s parent.

“Comdata is a leading provider in fleet trucking in North America,” FleetCor CEO Ronald Clarke said on a conference call to explain last week’s move to investors, describing the transaction as a “great way” to expand in the truck fuel-card processing sector. “The Comdata brand is synonymous with trucking and fueling.”

Clarke also said the purchase will bring specialized technology and a trained sales force to more effectively reach the trucking market.

FleetCor’s U.S. fuel card offerings are made under the Fuelman and Fleet Cards USA brand names. FleetCor’s markets also include services to commercial auto, oil companies and petroleum marketers.

Comdata, which was spun off into a separate company by Ceridian during 2013, hasn’t publicly disclosed its revenue and earnings from trucking industry services.

When Brentwood, Tennessee-based Comdata said earlier this year that it planned an initial public offering of its stock, financial details were shielded from public view. That step was allowed under a 2012 federal law known as Jump Start Our Business Startups that allows emerging growth companies with annual revenue of less than $1 billion to keep financial details confidential in IPO filings.

FleetCor, a worldwide vendor of fuel cards, had revenue of $527.4 million and net income of $163.7 million in the first half of 2014, representing increases of more than 20% in both categories. About half of its revenue is from international services.