WEX in Agreement to Buy Electronic Funds Source for $1.1 Billion
Payment solutions provider WEX Inc. has entered into a definitive agreement to acquire Electronic Funds Source for $1.1 billion and 4 million shares to be issued to investment funds affiliated with Warburg Pincus, EFS’ current owner.
WEX called EFS’ strong track record in mid- and large-size over-the-road fleet segments an ideal complement to its own programs.
When completed, the acquisition will “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,” Melissa Smith, CEO of WEX, said in a statement.
South Portland, Maine-based WEX said its customers, for instance, can expect the addition of a variety of corporate card options, including a single, multipurpose card.
It said EFS has a proprietary network of more than 14,000 accepting locations in the United States and Canada for the OTR fleet industry and has more than 17,000 customers.
Additionally, the combination will further diversify WEX’s earnings, the company said, and help to reduce its exposure to fuel price sensitivity. WEX estimated that about 16% of EFS’ revenue is exposed to fuel prices.
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, the company said.
The transaction, which the WEX board of directors unanimously approved, is subject to regulatory approvals and other customary closing conditions, the company said.
