South Portland-based Wright Express Corp., which processes automotive fuel purchases for commercial fleets and other credit card transactions, said Friday that it has acquired CorporatePay, a London-based provider of corporate prepaid cards for the travel industry, for about $27.5 million in cash.
The acquisition boosts Wright Express’ presence in the United Kingdom and elsewhere in Europe and expands its product base to include single-use accounts.
The deal is the latest in a series of acquisitions by Wright Express, which acquired Wright Express Australia in 2010 and rapid! PayCard last year. Wright Express said earlier this month that it plans to expand internationally and weigh acquisition opportunities.
Wright Express, which has about 900 employees, including almost 600 in Maine, recently posted a 22 percent jump in adjusted first-quarter earnings as the company expanded its fleet business and saw gains from its corporate charge-card product.
Its total revenue increased 17 percent, from $120.1 million to $140.1 million, from the first quarter of last year.
Shares of Wright Express gained 49 cents to close Friday at $57.18.
CorporatePay specializes in virtual cards and currency cards.
Virtual cards provide a customer with a 16-digit card number delivered to their computer screen. The account is prepaid with a credit card or debit card.
With currency cards, a customer prepays the card with their home currency and the money gets converted with each purchase using the prevailing exchange rates at the time of the purchase.
“CorporatePay’s rapidly expanding product offering of business-to-business prepaid solutions, strong management team and solid base of operations is a natural fit with Wright Express,” said Michael Dubyak, chairman and chief executive officer of Wright Express. “It accelerates our on-the-ground presence within the U.K. and Europe, markets in which we see significant opportunities. Second, it supplements our existing product offering to now include prepaid single-use accounts, or virtual cards.”
Wright Express focuses on processing automotive fleet fuel purchases and helping customers capture and analyze detailed fuel and maintenance information.
“With the European marketplace embracing virtual cards, the combination of debit and credit payment solutions enhances our competitive position in key segments of the travel industry and increases the size of our addressable market in terms of customer and geography,” Dubyak said. “The addition of multi-currency prepaid cards provides cross-selling opportunities to our global network of travel customers.”
The CorporatePay deal, which includes a potential additional payout of as much as $8.8 million based on performance milestones, is expected to slightly hurt Wright Express’ adjusted net income in the first year of combined operations, and to slightly add to earnings after that, Wright Express said.
CorporatePay, which was founded in 2008, had purchases on its cards of about $400 million in 2011, Wright Express said.
Staff Writer Jessica Hall can be contacted at 791-6316 or at:
jhall@mainetoday.com
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