The fuel card and workforce payment products to businesses company announced yesterday that it has agreed to purchase the privately held Comdata Inc. from the portfolio company Ceridian LLC for $3.45 billion.
Comdata provides business-to-business electronic payment solutions and offers fleet, virtual card, and gift card solutions to over 20,000 customers.
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“Comdata’s virtual payments business will add a completely new growth leg to FleetCor. We believe that the combination will result in significant synergies as we implement our operating disciplines to their portfolio of businesses,” said FleetCor CEO Ron Clarke.
“We expect the acquisition to be meaningfully accretive to earnings in fiscal year 2015. While our financial leverage will increase, we expect to de-lever quickly from the combined cash flow of the businesses,” FleetCor’s chief financial officer Eric Dey added.
Separately, TheStreet Ratings team rates FLEETCOR TECHNOLOGIES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FLEETCOR TECHNOLOGIES INC (FLT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."