WEX ends $1.7B M&A deals amid coronavirus risks, adds $400m in funding
Payments technology company WEX has received a $400 million investment to offset negative effects from coronavirus, and will back out of a $1.7 billion pair of deals announced six months ago.
The investment firm Warburg Pincus is providing the additional credit to stabilize WEX’s operations and free up cash flow, WEX said in a Monday press release.
WEX also said it’s decided not to close on two B2B payments companies it planned to buy — Australia’s Optal and Singapore-based eNett — because of negative effects on those companies related to the pandemic. WEX announced the deals in January 2020, with plans to close in the middle of this year.
Shareholders of Optal and eNett have each initiated lawsuits against WEX, according to the release. But the Portland, Maine-based corporation plans to fight back, stating WEX isn’t obligated to finalize the $1.7 billion combined transactions because of various material adverse effects coronavirus has caused.
“This [credit extension] better positions us to remain focused on our long-term strategic initiatives to drive our future success, and capitalize on the economic recovery when market conditions improve,” said Melissa Smith, WEX’s CEO, in the release.
WEX also said it’s introduced executive compensation changes that include revised executive performance goals in light of coronavirus’ effect on the global economy.