Corpay (CPAY) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of GPS Capital Markets and Paymerang expands the corporate payments segment, targeting B2B cross-border, AP automation, and treasury management for upper middle market companies.

• Both targets are high-growth, complementary businesses with strong client bases, specialized technology, and blue-chip rosters, enhancing scale and product breadth.

• Expands reach into new verticals and geographies, with GPS offering unique FX netting technology and vendor networks.

• The deals align with a strategy to focus capital allocation on corporate payments and drive long-term revenue growth.

• Supports goal to scale corporate payments revenue to nearly $2B by 2026.

Financial terms and conditions

• Paymerang acquisition to close July 1, 2024, for $475 million; GPS expected to close January 1, 2025, for $725 million.

• Combined, the acquisitions are projected to add over $200 million in incremental revenue in 2025 and increase the corporate payments segment by about 15%.

• Funded by $1B+ in operating cash flow, $1B undrawn revolver, and $200M from a vehicle business divestiture.

• 2024 capital deployment includes ~$2.1 billion, with $900 million for share repurchases.

• Pro forma leverage post-deals estimated at 2.7x, with flexibility to upsize credit facilities for future opportunities.

Synergies and expected cost savings

• Significant revenue and expense synergies identified, with EBITDA expected to grow over 50% above BAU in 2025.

• Revenue synergies estimated at $20M–$25M, driven by cross-sell opportunities and new product introductions.

• Cost synergies to be realized mainly in 2026 through tech, back office, and compliance consolidation, potentially improving margins by 15–20 points.

• Both acquisitions expected to be accretive in 2025 and to grow revenue over 20%.

• Significant revenue and profit synergies anticipated from both deals.