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 and AP automation markets, and enhances technology offerings such as FX netting and vendor networks.

• GPS brings a strong U.S. client base, blue-chip accounts, and advanced FX netting technology, complementing existing offerings and expanding reach into new verticals.

• Both deals align with the strategy to scale and accelerate growth in corporate payments, aiming for nearly $2 billion in segment revenue by 2026.

• Both targets have strong customer bases and high growth, supporting long-term growth ambitions.

Financial terms and conditions

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

• Funding from $1 billion operating cash flow, $1 billion undrawn revolver, and $200 million from a vehicle business divestiture.

• Combined, both acquisitions are projected to increase Corporate Payments revenue by ~15% in 2025.

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

• Pro forma leverage estimated at 2.7x post-deals, with flexibility to upsize credit facilities if needed.

Synergies and expected cost savings

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

• $20–$25 million in revenue synergies expected, mainly from cross-selling and product expansion.

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

• Significant cost synergies anticipated in tech, back office, and compliance, with operating margins expected to rise 15–20 points by 2026.

• Both deals expected to drive long-term profit synergies.