Wright Express, a provider of payment processing and information management services to the US commercial and government fleet industry, has entered into a definitive share purchase agreement to acquire the Australian assets of Retail Decisions consisting of its fleet and prepaid card businesses.
The assets are being acquired from Palamon Capital Partners, a private equity firm, and its co-investors Morgan Stanley Alternative Investment Partners and AlpInvest Partners for approximately AUD353m in cash (approximately USD318m).
The all cash transaction is anticipated to be immediately accretive to the company’s adjusted net income and is expected to close in the third quarter, subject to regulatory approval.
ReD Fuel is Australia’s largest multi-branded fuel card issuer with 270,000 cards in circulation. Their fleet cards are accepted at approximately 90 per cent of Australian fuel retailers.
ReD Prepaid is a processor of prepaid cards in Australia with approximately 60 per cent market share.
For 2009, these businesses generated revenues totalling AUD61.4m combined.
"This transaction is another step in advancing our international strategy," says Michael Dubyak, chairman and chief executive officer of Wright Express. "ReD Fuel and Prepaid provide us with international revenue diversification in an established, but growing market with an opportunity to further service an estimated nine hundred thousand small fleet vehicles in Australia currently without fuel cards. ReD Fuel will allow us to go to market with full service capabilities in Australia including private label, co-brand, and universal card programs, similar to our North American strategy. In addition to our processing capabilities, we will now be able to provide fully operational services to oil companies in Australia and New Zealand.”