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Fleetcor Technologies CEO Hosts AllStar Business Solutions Acquisition (Transcript)

Now, in addition, AllStar has a number of very attractive assets. It has got very satisfied customers with single digit attrition rates. It has an established well regarded brand name. It has a fixed fee revenue model. Such that revenues are stable and predictable. It enjoys excellent long standing relationships with its major brand and fuel merchants and it has a great group of very experienced people. So, all-in-all, a really attractive set of assets.

So, now I will move on to talk about the strategic rationale for the deal. Our acquisition strategy is to buy things we know and buy things we can improve. So first off, AllStar does only fuel cards and we know fuel cards. Second, AllStar operates in a market we know and understand and third, we believe that we can help AllStar realize its full potential. For example, we can help grow the business faster by better utilizing the web. Today, the web accounts are approximately 20% of Fleetcor’s new sale but virtually zero of AllStar’s. So clearly some upside there.

We have a great global processing platform that can improve product performance and dramatically reduce ongoing operating expense and we believe AllStar’s new independence from Arval can potentially open doors with other U.K. based leasing companies. So, in conclusion, it’s a deal with a very clear and very achievable investment piece.

Now, let me transition to the financial considerations for the deal. We paid an attractive price, particularly given, we received £50 million positive working capital at close. We expect this AllStar transaction will add at least $0.20 to our 2012 cash EPS or about 10% growth for the company’s cash earnings and post this transaction we will still have over $500 million of capital to pursue new acquisitions.

So, on closing, we couldn’t be happier with this deal. We acquired a big attractive business right in our wheelhouse. We paid an attractive price and we like our chances to improve profit performance overtime. We also fully expect this transaction will provide good financial returns.

Read the rest of this transcript for free on seekingalpha.com

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