WEX To Buy Electronic Funds Source LLC

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Payment processing company WEX plans to buy the Utah-based Electronic Funds Source LLC, its largest-ever acquisition that company officials said will expand its core business of payment processing for commercial vehicle fleets.

The company said it would buy competitor EFS for $1.1 billion in cash and 4 million shares to be distributed to investment funds affiliated with EFS owner Warburg Pincus.

The deal will make Warburg Pincus the company’s single largest shareholder. Warburg Managing Director Jim Neary also will join WEX’s board, the company said.

On October 19, WEX announced the deal with EFS, which it said has focused on a different segment of the fleet fuel payment market in Canada and the United States, where EFS has 17,000 customers. The company said it estimates that about 16 percent of EFS’ revenue has exposure to fuel price fluctuations and that the purchase will reduce the South Portland company’s own exposure to changes in fuel prices.

The week prior, the company announced it also plans to buy an Omaha-based health care payment processor for $80 million. The company has focused on travel payment processing and health care payment processing in addition to its core fuel card business.

WEX, formerly known as Wright Express, said the deal still requires regulatory approval. 

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