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Seven months after Portland-based payments provider WEX Inc. (NYSE: WEX) said it was not required to complete two acquisitions citing the pandemic's effect on those businesses, the company has completed the deals at a fraction of the original price tag and settled a lawsuit brought by the sellers.
The company, led by Chair and CEO Melissa Smith, said Tuesday that it has completed the purchase of eNett, a provider of business-to-business payments solutions for the travel industry, and B2B payments company Optal, for around $577.5 million.
It does not expect the deals to affect results, saying, "Though visibility remains limited due to COVID-19, WEX expects the impact on adjusted net income will be immaterial through calendar year 2021."
eNett was sold by by England-based Travelport Worldwide Ltd. and its owners, affiliates of Siris Capital Group LLC and Elliot Management Corp.'s private equity affiliate, Evergreen Coast Capital Corp., while Optal had been privately held.
In May, WEX signaled that it could the plug on the agreed sales, citing the pandemic's "material adverse effect" on the corporate travel sector. The sellers objected and filed a lawsuit in the United Kingdom to enforce the purchase agreement that WEX said has now been settled.
In conjunction with the acquisitions, WEX also announced that it is expanding the leadership team within its B2B payments-focused travel and corporate solutions business.
Anthony Hynes, former managing director and CEO of eNett International, will become president of the travel division, responsible for customers in the travel marketplace, while Jay Dearborn will remain WEX's president of corporate payments. Both will report directly to Smith.
WEX shares have a current market value of $9.04 billion, with shares trading at $204.90 Wednesday afternoon.
In its latest earnings release this past October, WEX posted a drop in third-quarter revenues and earnings amid the pandemic's impact on the firm's travel and corporate payment-processing businesses.
Third-quarter revenue fell 17% from a year ago to $382.1 million while adjusted net income attributable to shareholders was 39% lower, at $1.59 per diluted share. That fell shy of a $1.75 a share consensus forecast of analysts polled by Zacks Investment Research.
That same day, CFO Roberto Simon told Mainebiz the company had no plans to hit pause on mergers and acquisitions amid a strong balance sheet.
"I wouldn't put a pause there, because it's part of the strategy of the company going forward," he said, noting that the company's balance sheet "gives us a great deal of flexibility as we navigate the situation."
Editor's Note: This story updates market capitalization and share price, and adds details of what WEX announced in May.
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