FLT Announces Brazilian Acquisitions

Zacks

Recently, global fuel card and workforce payment provider FleetCor Technologies Inc. (FLT) declared a series of acquisitions undertaken and announced over the past one month in Brazil.

The acquisition of a leading provider of transportation cards and vouchers VB Servicos, Comercio e Administracao LTDA (VB) on Aug 9, 2013 is the first on the list. Later on Aug 26, 2013, the company signed an agreement to acquire DB Trans S.A. (DB), a leading Brazilian payment solution provider who caters to the independent truckers in Brazil.

On Sep 5, 2013, FleetCor inked a marketing deal with a leading Brazilian fuel card network operator Good Card. This deal pertained to FleetCor’s intentions to issue fuel cards operating in Good Card’s merchant acceptance network in Brazil.

The acquisition of DB is expected to culminate in the third quarter of 2013, and is subject to customary closing conditions. FleetCor expects to acquire DB and Good Card for an aggregate purchase consideration of $300 million, part of which will be paid in cash and the rest by borrowings under FleetCor’s revolving credit facility.

The above acquisitions will help FleetCor tap the growth opportunities in the Brazilian market. With all these acquisitions FleetCor will be able to deliver a wide array of goods in the Brazililan market starting from transportation and fuel cards to food.

For instance through the acquisition of VB, FleetCor aims to enhance its customer base as VB caters to more than 35000 business clients, nearly one million employees, and around 800 transportation agencies across the country. Additionally it also markets food cards through its association with Ednerd.

Again through the DB acquisition, FleetCor is focused to offer its products to the Brazilian transportation market, in turn generating higher revenues from the same. Last but not least the acquisition of Good Card, which has acceptance in almost 40% of Brazil’s gas stations, is expected to help FleetCor to issue a comprehensive fuel card program to the small and medium enterprises in Brazil.

FleetcCor currently carries a Zacks Rank #1 (Strong Buy). Among other payment providers, Financial Engines Inc. (FNGN), SS&C Technologies Holdings Inc. (SSNC) and Global Cash Access Holdings Inc. (GCA) carry a Zacks Rank #2 (Buy).

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