PORTLAND, Maine — The South Portland-based payment processor WEX Inc. this week closed a multi-million dollar deal to acquire a health care payment company and inked or advanced deals to expand its fuel card business in Europe.
The company reported Wednesday it closed on its $532.5 million acquisition of North Dakota-based Evolution1, a deal WEX pursued to expand its business beyond fuel card payments and capture a growing market for payment processing in the health care industry.
The acquisition comes as a growing share of the company’s revenue has come from outside its fuel card business in recent years. Last year, those new markets made up more than a quarter of the company’s total revenue, up from less than 7 percent in 2008.
As previously warned, credit rating agency Standard & Poor’s dropped the company’s credit rating from “BB” to “BB-” on news of its acquisition of Evolution1.
“Although we have incorporated WEX’s propensity for making debt-financed acquisitions into our assessment, the Evolution1 acquisition is larger than we had expected,” said Standard & Poor’s credit analyst Igor Koyfman. “It also follows the company’s previously announced plans to acquire the assets of ExxonMobil’s European commercial fuel card program, Esso Card, through a majority-owned joint venture.”
That second deal also advanced this week. The company announced Thursday it signed a definitive agreement to acquire Esso Card, a deal it expects to close late this year or in early 2015. And the company announced fuel company Shell selected it as a prepaid fuel card processor for commercial fleets.
Both deals are part of the company’s expansion of its core fuel card business into Europe.
CEO Melissa Smith said that the deal with Shell “underscores the relative quality and innovation of our fleet products” and the agreement to acquire Esso Card “remains an important element to building our on-the-ground presence in the European market.”
The week of announcements for the public company was also marked by its stock price hitting an all-time high of $108 per share Tuesday. The stock was down from that peak slightly Friday morning, when it opened at $104.
With the acquisition of Evolution1, which will operate from North Dakota as a wholly owned subsidiary of WEX, the company employs about 1,700, with more than 600 in Maine.