FleetCor Swipes Comdata for $3.45B

NEW YORK (The Deal) -- FleetCor Technologies (FLT) said Wednesday it would acquire Comdata in a $3.45 billion deal that would expand its business as a provider of business-to-business payment tools.

Terms of the deal call for Norcross, Ga.-based FleetCor to issue about 7.3 million of its common shares to acquire Brentwood, Tenn.-based Comdata, and to issue about $2.4 billion in new debt to be used to refinance Comdata's outstanding indebtedness. Comdata is part of Ceridian, a portfolio company of Thomas H. Lee Partners LP and Fidelity National Financial  (FNF).

Post-deal, a representative from Thomas H. Lee will be appointed to the FleetCor board. FleetCor said that while its leverage would increase to complete the deal, the company expects the combined cash flow of the businesses to allow it to quickly pay down that new debt.

Comdata is a provider of electronic payment services to businesses, ranking as one of the largest issuers and processors of fleet cards and gift card products for more than 20,000 customers. The business employs about 1,300 and enables more than $54 billion in annual payments.

FleetCor, which provides fuel cards and workforce payment products for business customers, said the deal will broaden its portfolio and help it to extract costs.

"We have followed Comdata's growth and development for many years, and are excited today to be bringing the companies together" said FleetCor chairman and CEO Ron Clarke. "We believe that the combination will result in significant synergies as we implement our operating disciplines to their portfolio of businesses."


T.H. Lee and Fidelity acquired Ceridian, a provider of human resources software and other business tools, in 2007 for $5.3 billion. The company formally split itself between its human capital management operation and Comdata in October 2013.

Fidelity National Financial Ventures, a tracking stock established to follow the value of the insurer's investments, said it would receive about 2.3 million FleetCor shares as part of the deal valued at about $300 million based on the buyer's Aug. 11 closing price, giving the investor a post-close ownership stake in FleetCor of about 3%.

FleetCor was advised by Barclays (BCS) and Chris Baugher of Alston & Bird.

Ceridian received financial advice from JPMorgan Securities'  (JPM) Jay Hofmann and Deutsche Bank's (DB) Mike Henry, Jason Gurandiano, Lee Counselman and Jacques Raphael.

A Weil Gotshal & Manges LLP team led by Michael Aiello, Kenneth Heitner, Chayim Neubort, Paul Wessel, Todd Chandler, Alexander Lynch, Allison Liff, John Dedyo, Michael Epstein, Steven Newborn, Laura Wilkinson and Randi Singer provided legal counsel.

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