SOUTH PORTLAND, Maine -- Wright Express Corp. said it has entered into a definitive asset purchase agreement to acquire certain assets of privately held Pacific Pride Services Inc. for approximately $32 million in cash, financed through the company's existing credit facility. The transaction is expected to close before the end of first-quarter 2008.
The U.S. fleet fuel distributor channel represents an important strategic growth opportunity for Wright Express. As a result of the acquisition, it expects to increase its penetration of the distributor channel by leveraging Pacific Pride's [image-nocss] local market presence and brand recognition, as well as its platform and products for commercial vehicle fleets.
Pacific Pride's franchise network encompasses more than 330 independent fuel franchisees. The company's network of independent commercial cardlock fueling sites processes approximately 32 million fleet card transactions annually. Pacific Pride was founded in 1984 and is headquartered in Salem, Ore. It generates approximately 80% of its revenue from transaction fees. Revenues for 2007 were approximately $7 million.
Franchisees issue their own Pacific Pride commercial fueling cards to fleet customers. These cards provide access to fuel at more than 1,000 Pacific Pride and strategic partner locations in the United States and Canada. Pacific Pride provides a variety of services to franchisees including training, marketing, advertising, network operations and financial settlement between franchisees.
"Over the past two years Wright Express has made a large investment in developing a state-of-the-art distributor payment processing and information platform for Pacific Pride, and we are pleased to be taking this relationship to the next level," said Michael Dubyak, president and CEO of Wright Express. "The Pacific Pride platform and product set, which Wright Express has now enhanced, will provide us with immediate access to a broader universe of fuel marketers and enhanced pricing and settlement capabilities. This should strengthen our relationships with distributors and the small fleets they serve, accelerating our strategic initiatives in these key markets."
He added, "The more than 330 independent distributors in Pacific Pride's franchisee network represent an important cross-selling opportunity for our new TelaPoint business. Every one of these Pacific Pride franchisees manages fuel storage tanks at their retail and bulk sites, and TelaPoint offers a browser-based solution for fuel purchasing and inventory management. The potential to provide fuel distributors with a comprehensive product—from fuel inventory management on the wholesale end to fleet payment processing and purchasing controls on the retail end—is an exciting development for Wright Express."
David Harris, president of Pacific Pride said, "As part of the Wright Express organization, Pacific Pride will benefit from increased site coverage and better access to the technology, services and fleet products offered by Wright Express, which in turn should enhance franchisee network growth. Our existing agreements and relationships with Pacific Pride franchisees will remain in effect. We expect to remain based in Salem, Ore., and to continue offering and supporting all of our current card products."
South Portland, Maine-based Wright Express is a leading provider of payment processing and information management services to the U.S. commercial and government vehicle fleet industry. It provides these services for approximately 300,000 commercial and government fleets containing 4.5 million vehicles. The company markets its payment processing services directly and is an outsourcing provider for more than 125 strategic relationships, and offers a MasterCard-branded corporate card.
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