FleetCor Technologies, a global provider of fuel cards and workforce payment products to businesses, has agreed to acquire Comdata from Ceridian for $3.45bn.
As an issuer and a processor, Comdata offers fleet, virtual card, and gift card solutions to more than 20,000 customers with the help of nearly 1,300 employees and enables over $54bn in payments annually.
Under the terms of the transaction, FleetCor will finance the $3.45bn acquisition with nearly $2.4bn of new debt and the issuance of approximately 7.3 million shares of FleetCor common stock to Ceridian.
The acquisition of Comdata will boost FleetCor’s North American fuel card business into new, unserved markets, thereby expanding potential.
Furthermore, it will also allow FleetCor to foray into the virtual payments space, an early innings high growth category.
FleetCor Technologies chairman and CEO Ron Clarke said: "We have followed Comdata’s growth and development for many years, and are excited today to be bringing the companies together.
"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."
Ceridian operates as a portfolio company of funds affiliated with Thomas H Lee Partners, (THL) and Fidelity National Financial.
Together with the completion of transaction, a representative from THL will be appointed to the FleetCor board of directors.