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."