South Portland paycard company to sell Oregon subsidiary

Posted July 30, 2014, at 6:04 p.m.
Last modified Aug. 07, 2014, at 8:32 a.m.

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Melissa Smith is the President and CEO for international payment processor WEX.
Courtesy WEX
Melissa Smith is the President and CEO for international payment processor WEX.

PORTLAND, Maine — Paycard processor WEX Inc. plans to make about $29 million on its sale of Oregon subsidiary Pacific Pride this year, part of the South Portland-based business’ increasing focus to grow its revenue from international and health care markets.

“We didn’t think that was consistent with the way we want to grow and evolve the business,” CEO Melissa Smith said in an interview Wednesday.

The company has this year signed or made progress on deals to move further into international markets for vehicle fleet payment cards and health care payments.

Smith said those deals won’t have any immediate impact on its staffing in Maine, but space constraints keep it constantly evaluating its available space in South Portland.

“It’s a good problem to have,” Smith said. “We’re running out of room and we will continue to look at our options, but Maine is our home.”

The company employs about 1,700 people, nearly double the number when it went public in 2005, with more than 600 in Maine.

The news of its selling franchise commercial fueling subsidiary Pacific Pride comes as the company announced its latest quarterly earnings. For the second quarter of the year, WEX boosted its net income about 1.8 percent over the same time last year on revenue growth of 13 percent in the second quarter.

The market responded positively to the earnings announcement as its share price rose more than 4 percent in morning trading, to $109.57.

Smith said the decision to sell its Pacific Pride subsidiary comes as the company pursues long-term growth plans.

The company closed on its $532.5 million purchase of the North Dakota-based health care payment processor Evolution1 last month and this month announced a definitive deal to acquire a majority stake in the European fleet card accounts of ExxonMobil, called its Esso Card program.

On news of the Evolution1 acquisition, credit rating agency Standard & Poor’s dropped the company’s credit rating from “BB” to “BB-,” on analysis that the deal could cause the company’s ratio of debt to earnings to get as high as 3-to-1.

Smith said she doesn’t expect the downgrade to have an impact on the business, which she said will still retain a debt-to-earnings similar to when the company first went public.

“It’s not an uncomfortable range for us and we’ll be leveraged as we had planned,” Smith said.

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