FLEETCOR® Upsizes Credit Facility by $600 million; Establishing 10b5-1 Plan to Repurchase Shares

Rhea-AI Summary

FLEETCOR Technologies, Inc. (NYSE: FLT) successfully closed on an amendment to its credit facilities, resulting in a $600 million increase in capacity. The company increased its revolver from $1.5 billion to $1.775 billion and its borrowings under its Term Loan A facility by $325 million. The amendment is leverage neutral and will be used to drive earnings growth through M&A and stock repurchasing in 2024.

Positive

• Successful amendment to credit facilities resulting in a $600 million increase in capacity
• Increased revolver from $1.5 billion to $1.775 billion and borrowings under Term Loan A by $325 million
• Leverage neutral transaction with consistent interest rate and maturity terms
• Anticipated use of increased debt facility to drive earnings growth through M&A and stock repurchasing in 2024

Negative

• None.

Financial Analyst

The recent amendment to FLEETCOR Technologies' credit facilities, resulting in a $600 million increase in capacity, is a strategic financial maneuver that could potentially strengthen the company's position for future growth. The upsizing of the revolver credit from $1.5 billion to $1.775 billion, along with the additional $325 million in Term Loan A, provides FLEETCOR with a significant liquidity boost. This liquidity is vital as it gives the company the flexibility to pursue growth strategies, such as mergers and acquisitions (M&A), which could lead to an increase in market share and revenue streams.

Moreover, the use of these proceeds to pay down the revolver balance is a prudent approach to manage debt effectively. The unchanged interest rate and maturity terms indicate a stable borrowing cost, which is beneficial for long-term financial planning. For investors, this financial restructuring suggests that FLEETCOR is actively managing its capital structure to optimize its cost of capital and maintain a solid balance sheet.

Market Research Analyst

From a market perspective, FLEETCOR's decision to increase its debt capacity may signal confidence in its future earnings potential. The company's plan to use the additional funds for both M&A activities and stock repurchases in 2024 could be a catalyst for earnings growth, potentially leading to a positive market reaction. Stock repurchase programs often convey a message that the company believes its stock is undervalued and can also serve to increase earnings per share by reducing the number of shares outstanding.

However, it is essential to monitor how effectively FLEETCOR deploys this capital. Successful integration of acquisitions and wise stock repurchases can enhance shareholder value, whereas poor M&A decisions or overpaying for share buybacks can have the opposite effect. The market will also be observing the company's leverage ratios post-transaction to ensure that the increased debt does not adversely affect the company's financial health.

M&A Specialist

In the realm of mergers and acquisitions, the additional liquidity afforded by the upsized credit facilities could position FLEETCOR as a more aggressive player. The company's ability to fund potential acquisitions without the need for immediate equity financing can provide a strategic advantage in competitive bidding situations. Additionally, this financial flexibility may allow FLEETCOR to target larger or more strategic acquisitions that could provide synergies and drive transformational growth.

It is important to evaluate the sectors and companies FLEETCOR might consider for M&A, assessing how these moves could complement or diversify their current offerings. The impact of these acquisitions on the company's competitive positioning, as well as the integration risks and potential for cost savings, will be critical factors in determining the success of such growth strategies.

ATLANTA--(BUSINESS WIRE)-- FLEETCOR Technologies, Inc. (NYSE: FLT), a leading global business payments company, today announced that it successfully closed on an amendment to its pro rata Term Loan A and Revolver A credit facilities. The transaction was leverage neutral and results in a $600 million increase in the Company’s capacity under its facilities. This amendment resulted in an increase to the Company’s revolver from $1.5 billion to $1.775 billion. In addition, the Company increased its borrowings under its Term Loan A facility by $325 million and used those proceeds to paydown its revolver balance. Interest rate and maturity terms remain consistent with the existing credit facilities.

FLEETCOR anticipates using the increased debt facility to drive earnings growth through both M&A and repurchasing FLEETCOR stock in 2024.

“We’re very pleased with the broad participation and demand for our credit facility, resulting in $600 million of incremental liquidity with no change in credit terms,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc.

“These upsized credit facilities are reflective of the high demand for our credit as a result of our strong balance sheet and the significant free cash flow the Company consistently generates,” said Tom Panther, chief financial officer, FLEETCOR Technologies, Inc.

Bank of America, N.A. is the Administrative Agent and BOFA Securities, Inc., PNC Capital Markets, LLC, TD Securities (USA) LLC, and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Bookrunners Fifth Third Bank, National Association, BMO Bank N.A., The Bank of Nova Scotia, and Citizens Bank, N.A., as Co-Documentation Agents Barclays Bank, PLC, Citibank, N.A., and JP Morgan Chase Bank, N.A. as Co-Managing Agents.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about FLEETCOR’s beliefs, assumptions, expectations and future performance, are forward-looking statements. Forward-looking statements can be identified by the use of words such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project” or “expect,” “may,” “will,” “would,” “could” or “should,” the negative of these terms or other comparable terminology.

These forward-looking statements are not a guarantee of performance, and you should not place undue reliance on such statements. We have based these forward-looking statements largely on preliminary information, internal estimates and management assumptions, expectations and plans about future conditions, events and results. Forward-looking statements are subject to many uncertainties and other variable circumstances, such as the impact of macroeconomic conditions, including any recession that has occurred or may occur in the future, and whether expected trends, including retail fuel prices, fuel price spreads, fuel transaction patterns, electric vehicle, and retail lodging price trends develop as anticipated and we are able to develop successful strategies in light of these trends; our ability to successfully execute our strategic plan, manage our growth and achieve our performance targets; our ability to attract new and retain existing partners, fuel merchants, and lodging providers, their promotion and support of our products, and their financial performance; the failure of management assumptions and estimates, as well as differences in, and changes to, economic, market, interest rate, interchange fees, foreign exchange rates, and credit conditions, including changes in borrowers’ credit risks and payment behaviors; the risk of higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to successfully manage our credit risks and the sufficiency of our allowance for expected credit losses; our ability to securitize our trade receivables; the occurrence of fraudulent activity, data breaches or failures of our information security controls or cybersecurity-related incidents that may compromise our systems or customers’ information; any disruptions in the operations of our computer systems and data centers; the international operational and political risks and compliance and regulatory risks and costs associated with international operations; the impact of international conflicts, including between Russia and Ukraine, as well as within the Middle East, on the global economy or our business and operations; our ability to develop and implement new technology, products, and services; any alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; the regulation, supervision, and examination of our business by foreign and domestic governmental authorities, as well as litigation and regulatory actions, including the lawsuit filed by the Federal Trade Commission (FTC); the impact of regulations relating to privacy, information security and data protection; use of third-party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering (AML) and anti-terrorism financing laws; changes in our senior management team and our ability to attract, motivate and retain qualified personnel consistent with our strategic plan; tax legislation initiatives or challenges to our tax positions and/or interpretations, and state sales tax rules and regulations; the risks of mergers, acquisitions and divestitures, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; as well as the other risks and uncertainties identified under the caption "Risk Factors" in FLEETCOR's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 28, 2023 and subsequent filings with the SEC made by us. These factors could cause our actual results and experience to differ materially from any forward-looking statement made herein. The forward-looking statements included in this press release are made only as of the date hereof and we do not undertake, and specifically disclaim, any obligation to update any such statements as a result of new information, future events or developments, except as specifically stated or to the extent required by law. You may access FLEETCOR’s SEC filings for free by visiting the SEC web site at www.sec.gov.

About FLEETCOR®

FLEETCOR Technologies (NYSE: FLT) is a leading global business payments company that simplifies the way businesses manage and pay their expenses. The FLEETCOR portfolio of brands help companies automate, secure, digitize and control payments on behalf of, their employees and suppliers. FLEETCOR serves businesses, partners and merchants in North America, Latin America, Europe, and Asia Pacific. For more information, please visit www.FLEETCOR.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240207358679/en/

Investor Relations

Jim Eglseder, 770-417-4697

Jim.Eglseder@fleetcor.com

Media Relations

Chad Corley, 770-729-5021

Chad.corley@fleetcor.com

Source: FLEETCOR Technologies, Inc.

FAQ

What is the ticker symbol for FLEETCOR Technologies, Inc.?

The ticker symbol for FLEETCOR Technologies, Inc. is FLT.

What was the increase in the company's revolver after the amendment to its credit facilities?

The company increased its revolver from $1.5 billion to $1.775 billion after the amendment.

How does FLEETCOR Technologies, Inc. plan to use the increased debt facility?

FLEETCOR Technologies, Inc. plans to use the increased debt facility to drive earnings growth through M&A and stock repurchasing in 2024.

Who are the Joint Lead Arrangers and Joint Bookrunners for FLEETCOR Technologies, Inc.?

The Joint Lead Arrangers and Joint Bookrunners for FLEETCOR Technologies, Inc. are BOFA Securities, Inc., PNC Capital Markets, LLC, TD Securities (USA) LLC, and Wells Fargo Securities, LLC.