Wright Express Corp. reached a deal to acquire certain assets of privately held Pacific Pride Services Inc. for approximately $32 million in cash. The deal will be financed through the company’s existing credit facility and is expected to close before the end of the first quarter of 2008.
The U.S. fleet fuel distributor channel represents an important strategic growth opportunity for Wright Express. As a result of the acquisition, Wright Express expects to increase its penetration of the distributor channel by leveraging Pacific Pride’s local market presence and brand recognition, as well as its platform and products for commercial vehicle fleets.
Pacific Pride’s franchise network encompasses over 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 issues its 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 U.S. and Canada. Pacific Pride also 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. "A pioneer in card lock fueling, Pacific Pride has built a great reputation for service and a broad nationwide network of fueling sites."
Pacific Pride generates approximately 80% of its revenue from transaction fees. Revenues for 2007 were approximately $7 million.
"The more than 330 independent distributors in Pacific Pride’s franchisee network represent an important cross-selling opportunity for our new TelaPoint business," said Dubyak. "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."