WEX Inc. is working to finalize several key acquisitions to bring the corporate payments provider into new markets.
WEX announced its acquisition of Evolution1 in June and closed the purchase in July, bringing the fleet card provider into the health care market. WEX also signed a definitive purchase and sale agreement this month for the Esso Card program it is buying from ExxonMobil.
The payments industry was the most active financial technology market for mergers and acquisitions in the first half of 2014, according to investment bankers Berkery Noyes. One of WEX's objectives is to grow the business both organically and through M&A, said Melissa Smith, WEX's chief executive, during an earnings call on July 30.
The company's revenue increased 13%, to $201.6 million, from a year earlier and its net income grew 28%, to $54 million. WEX has continued to expand its fleet card business with the number of vehicles serviced worldwide growing 7%, to 7.9 million, from a year earlier. Total fuel transactions processed grew to 98.6 million, an increase of 6% over the prior year.
WEX "has the ability to really work well in complex payments environments and simplify that for our customers," said Smith in an interview. With the purchase of Evolution1, WEX can "offer a product that is helping employers manage all consumer-driven health care accounts."
The company is also bolstering its virtual card programs, which increased their spending volume by 36%. "Travel is certainly the largest of the places where the [virtual card] product is used," said Smith.
In acquiring the Esso program, WEX faced a "fairly lengthy" regulatory process but was ultimately approved and can now move forward with picking up ExxonMobil's operations by the beginning of 2015.