Field services software provider WEX recently unveiled its acquisition of Payzer, a cloud-based business management software company. The deal, valued at approximately $250 million, includes provisions for additional contingent payments amounting to up to $11 million.
WEX plans to finance this acquisition through its revolving credit facility and available cash resources. The transaction’s completion is expected before the close of 2023, subject to customary closing conditions. Upon finalization, WEX aims to enhance its product suite, presenting a new, scalable Software as a Service (SaaS) solution to its extensive customer base, which spans nearly 150,000 small field service companies. This strategic move positions WEX for further growth and innovation in the evolving landscape of business management software.
Key Takeaways
- WEX’s decision to acquire Payzer is a strategic move aimed at expanding its product offerings for over 150,000 field service companies.
- The acquisition, valued at $250 million with a $11 million contingent payment, will be financed through WEX’s revolving credit facility and available cash.
- By integrating Payzers software solutions into WEX’s platform, the goal is to streamline operations for HVAC, plumbing, and roofing businesses.
- While WEX expects growth from this acquisition, it acknowledges the need to consider uncertainties and risks as outlined in filings.
- This acquisition demonstrates WEX’s dedication to improving efficiency and seizing mutually beneficial market opportunities.
WEX’s Acquisition Of Payzer Marks A Milestone In Global Commerce Platform’s Expansion Strategy
The global commerce platform, known for making business operations easier, has officially announced that it has completed an agreement to acquire Payzer.
Payzer is a growing company that provides cloud-based management software for field services. This acquisition will help WEX in its growth strategy by expanding its product range and creating opportunities for cross-selling. As a result, WEX will be able to offer a SaaS-based solution to its customer base, which includes almost 150,000 small businesses involved in field services.
Image source: Payzer
WEX had previously revealed the agreement to acquire Payzer on October 26th, 2023. WEX is a business platform dedicated to simplifying the complexities of managing businesses. The company has built an ecosystem that offers solutions to its global clients. By leveraging their data and expertise in simplifying benefits, facilitating transactions, and transforming mobility solutions, WEX is committed to helping companies navigate complexities effortlessly and achieve their full potential.
Melissa Smith, the CEO of WEX, shared her excitement regarding the acquisition of Payzer. She expressed her enthusiasm for introducing an innovative offering to their Mobility customers through Payzer. Melissa highlighted that Payzer’s outstanding service and extensive range of features bring together payment solutions and software as a service (SaaS). She believes that Payzer perfectly exemplifies its ability to identify a growing market with a customer base that aligns well with its existing network. Ultimately, this acquisition will enable them to provide a product and service package tailored to meet the needs of their customers.
Transaction Details and Operational Synergy
As per the definite agreement, WEX will acquire Payzer for a sum not surpassing $250 million, along with a potential additional payment of up to $11 million, contingent upon performance criteria involving factors like working capital. WEX will utilize its revolving credit facility and available cash to fund the acquisition. The completion of the transaction is subject to standard closing conditions and is expected to occur before the conclusion of 2023.
WEX stands out as a leader in mobility solutions, catering to over 600,000 customers and managing approximately 19 million vehicles on its Mobility platforms. On the other hand, Payzer operates as a comprehensive management SaaS provider of field service, offering various features, including dispatching, scheduling, invoicing, customer communications, supply ordering, maintenance agreements, and sales proposals.
Initially focusing on serving HVAC, plumbing, and roofing small businesses, Payzer integrates all these solutions into an easy-to-use and user-friendly software package accessible through both desktop and mobile applications. Moreover, Payzer has strong partnerships with key original equipment manufacturers (OEMs) in its industries, streamlining the customer-supplier relationship for its clients.
WEX Financial Results
The complete revenue for Q3 of 2023 experienced a 6% rise, amounting to a solid $651.4 million compared to the $616.1 million previously in Q3 of 2022. This revenue growth comes at $31.9 million in adverse effects from spreads and fuel prices, along with a $5.3 million favorable effect from forex rates.
On a GAAP basis, the net income due to shareholders surged by a solid $62.5 million, resulting in net earnings of $18.4 million, equivalent to $0.42 per share (diluted) for the Q3 of 2023. This compares to a net loss of around $44.1 million, which is $1.00 per share (diluted), for Q3 of 2022.
The non-GAAP metric, revised net income due to shareholders, reached $176.8 million of Q3 of 2023, which is $4.05 per share (diluted), marking a 15% increase per share (diluted) compared to $157.8 million, which is $3.51 per share (diluted), for the exact period in the previous year. The GAAP operating income margin for the Q3 of 2023 reached 26.8%, contrasting with 3.5% for the exact period in the preceding year. The adjusted operating income margin stood at 41.8% in Q3 of 2023, compared to 39.1% for the prior year’s comparable period. Please refer to WEX’s official site for more information.
Forward-Looking Acknowledgements By WEX
The press release by WEX has forward-looking announcements, including discussions about the anticipated advantages of the acquisition. Any information in this press release unrelated to historical facts constitutes forward-looking views. The usage of terms such as “believe,” “anticipate,” “could,” “continue,” “expect,” “estimate,” “may,” “intend,” “project,” “plan,” and “will.” Other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements necessarily include these specific words.
The forward-looking information has both unidentified and identified uncertainties, risks, and some additional factors that could potentially lead to significant discrepancies between the actual results or performance and the future results or performance indicated or implied by these views These factors include WEX’s ability to finalize or effectively integrate the acquisition and realize the expected benefits of the acquisition.
Other risks and uncertainties are outlined in WEX’s Item 1A of the Annual Report on Form 10K for the ending year 31 December 2022, submitted on 28 February 2023 to the SEC, as well as Quarterly Reports of WEX’s on Form 10 Q for periods ending 31 March 2023, and 30 June 2023, filed with the SEC on 27 April 2023, and 27 July 2023, respectively, along with subsequent filings with the SEC. These forward-looking acknowledgments are relevant as of the date of this press release, and it is advised not to rely on these statements excessively. WEX disclaims any responsibility to update forward-looking acknowledgments due to new information, future events, or other factors.
About WEX
Image source: WEX
WEX Inc. operates as a technology-driven company providing corporate payment solutions. Within its fleet solutions portfolio, the company caters to a diverse range of clients, including large and small businesses, government fleets, and over-the-road cardholders. The Fleet Solutions segment focuses on offering payment solutions for fleet vehicles, along with transaction processing and information management services.
Additionally, it provides account and account retention services, authorization and billing inquiries, maintenance services, credit and collections services, merchant services, analytics solutions, and various ancillary services and tools aimed at helping fleets manage expenses and capital requirements.
WEX has built a robust ecosystem that seamlessly integrates personalized solutions for its global customer base. Leveraging its comprehensive data and specialized expertise in simplifying benefits, reinventing mobility, and facilitating seamless transactions, WEX is dedicated to enabling companies to navigate complexity effortlessly and achieve their full potential.
About Payzer
Payzer and Payzеrware are trademarked brands owned by Payzer, LLC, in North Carolina. Since 2012, it has been offering mobile payment processing services. Payzеr serves as a provider of Software-as-a-Service (SaaS) payment solutions for businesses, providing a range of financial tools to facilitate the growth of contractors’ businesses.
Its mobile and cloud-based platform enables businesses to accept credit and debit card payments at the point of sale. Moreover, it allows companies to issue debit purchasing cards to their employees and subcontractors, facilitating direct money transfers to these cards and enabling the tracking of company purchases. Douglas Little and Joe Giordano founded the company, and its primary focus lies in delivering financial solutions for contractors with transparent pricing and no hidden fees. The company caters to a diverse array of industries, including pool services, plumbing, roofing, and more.
Conclusion
WEX’s acquisition of Payzer marks a significant milestone in expanding its global commerce platform. It aims to enhance its product suite to benefit a vast customer base comprising small field service companies. The strategic integration of Payzer’s cloud-based management software with WEX’s offerings is expected to streamline operations for businesses in the HVAC, plumbing, and roofing sectors.
