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WEX Concludes Acquisition of Longtime Partner Noventis

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WEX Inc. (WEX - Free Report) announced yesterday that it has completed the previously announced acquisition of electronic payments network Noventis. The company, however, did not say how much it paid for Noventis.

Focus on Boosting Corporate Payments Business

WEX had a longstanding relationship with Noventis as a supplier of virtual cards that enable payment transactions through Noventis’ network. The acquisition is expected to expand and strengthen its position as a corporate payments supplier thereby boosting the Travel and Corporate Solutions segment.

WEX Inc. Revenue (TTM)

 

 

WEX will add payments functionality and flexibility to Noventis’ customers that include financial institutions, bill pay processors and accounts payable (AP) software providers.

“The addition of Noventis expands our reach in a dynamic and growing market and supports our strategy of being a leader in the corporate payments industry,” stated Jay Dearborn, WEX’s president of corporate payments.

Acquisition Precedes Q4 Release

The acquisition will not be accretive to WEX’s fourth-quarter 2018 results, which are expected to be reported on Feb 20. The company may provide more details on the earnings call.

The Zacks Consensus Estimate for WEX’s fourth quarter earnings is pegged at $2.11, reflecting year-over-year increase of 41.6%. The consensus mark for revenues is at $372 million, mirroring an increase of 12.4% from the year-ago quarter’s tally.

With an earnings ESP of -0.27% and a Zacks Rank 4 (Sell), the company doesn’t seem to be poised for earnings beat. This is because, per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates.

Shares of the company have gained 3.2% over the past year, underperforming the 5% rally of the industry it belongs to.

Stocks to Consider

Some better-ranked stocks in the broader Zacks Business Services sector include Booz Allen Hamilton (BAH - Free Report) , Republic Services (RSG - Free Report) and Waste Connections (WCN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected EPS (three to five years) growth rate for Booz Allen Hamilton, Republic Services and Waste Connections ias 14.4%, 10.7% and 11.7%, respectively.

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