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Company: FleetCor Technologies (FLT)
Business: FleetCor is a business payments company that helps businesses spend less by enabling them to manage their expense-related purchasing and vendor payments processes. The company operates through six segments: fuel, corporate payments, tolls, lodging, gift and other. It offers corporate payments solutions, such as accounts payable automation; vehicle and mobility solutions, including fuel solutions to businesses and government entities that operate vehicle fleets, as well as gift card program management and processing services. The company also provides other products, including payroll cards, vehicle maintenance service solutions, long-haul transportation solutions and prepaid food vouchers or cards.
Stock Market Value: $15.5B ($210.85 per share)
Activist: D.E. Shaw & Co.
Percentage Ownership: n/a
Average Cost: n/a
Activist Commentary: D.E. Shaw is a large multi-strategy fund that is not historically known for activism. The firm is not an activist investor, but it uses activism as an opportunistic tool in situations when it’s deemed useful. The firm seeks solid businesses in good industries, and if it identifies underperformance that is within management’s control, it will take an active role. D.E. Shaw places a premium on private, constructive engagement with management and as a result often comes to an agreement with the company before its position is even public.
What’s happening?
On March 15, D.E. Shaw Group and FleetCor Technologies entered into an agreement pursuant to which the company agreed to appoint Rahul Gupta (former CEO of RevSpring, a health-care billing and payments company) to the board, and agreed to add another, mutually agreed-upon director to the board. Additionally, the company agreed to form an ad hoc strategic review committee to assist the board as it considers various strategic alternatives. D.E. Shaw agreed to abide by certain voting and standstill restrictions.
Behind the scenes
FleetCor is a business payments company with four main business lines: fuel, corporate payments, tolls and lodging. Fuel has traditionally comprised almost 50% of its revenues, and there is a perception in the market that as the world transitions toward electric vehicles, this will become a business with no terminal value as revenue gradually declines. However, revenue in this business increased 14% from last year, and FleetCor has been working to incorporate the transition toward EV…
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