WEX to Buy Electronic Funds Source

Corporate-payment company WEX Inc. on Monday said it agreed to buy rival Electronic Funds Source LLC from private-equity firm Warburg Pincus LLC for about $1.4 billion in cash and stock.

WEX will pay $1.1 billion in cash and issue 4 million common shares, which will result in investment funds affiliated with Warburg Pincus becoming WEX's largest shareholder. Warburg Pincus managing director Jim Neary will join WEX's board once the transaction is complete.

Maine-based WEX, which has seen a deceleration in fuel transaction growth, said the deal will immediately add to earnings and help reduce WEX's exposure to fuel-price sensitivity. WEX operates two segments—fleet-payment solutions and non-fleet-payment solutions—and has faced headwinds from sharply lower energy prices.

In its most recent quarter, WEX reported a profit of $26.5 million, down 39% from a year earlier. The company in July cut its revenue guidance for the year amid lower projected fuel prices.

The EFS deal follows WEX's $80 million acquisition last week of Benaissance, a move to expand in the health-care-payments space.

Write to Lisa Beilfuss at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 19, 2015 09:25 ET (13:25 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.