WEX Inc. WEX yesterday announced its plan to snap up Go Fuel Card, the fuel card business of fuel station and convenience store retailer — EG Card.
Breda, Netherlands-based Go Fuel Card has presence in Belgium, France and Luxembourg with 200,000 proprietary cards in circulation. It serves small and medium enterprise (SMEs) as well as larger fleet players, operating on an independent proprietary card network with acceptance at more than 5,000 retail sites.
The acquisition, subject to customary closing conditions, is expected to close in the second quarter of 2019. WEX did not reveal the amount it will pay for Go Fuel Card.
How Will WEX Benefit?
WEX will be in a position to expand Fleet business throughout EG locations in the United States, Europe and Australia.
According to Scott Phillips, President, Global Fleet, WEX, “This is an attractive business that projects further reductions to our sensitivity to retail fuel prices, while providing us a strong pathway for organic growth and value creation over time.”
We believe that acquisitions are a key growth catalyst for WEX. Over time, they have enabled the company to significantly enhance offerings and expand business.
Shares of WEX have gained 21.5% over the past year compared with the 22.1% rise of the industry it belongs to.
Zacks Rank and Other Key Picks
Currently, WEX has a Zacks Rank #3 (Hold). Some other top-ranked stocks in the broader Zacks Business Services sector are Copart CPRT, Booz Allen Hamilton BAH and Automatic Data Processing ADP, each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term expected EPS (three to five years) growth rate for Copart, Booz Allen and Automatic Data Processing is 20%, 14.6% and 13%, respectively.
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