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FLEETCOR (FLT) to Benefit From AFEX Acquistion: Here's How

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FLEETCOR Technologies, Inc.(FLT - Free Report) yesterday announced that it has inked a deal to acquire Associated Foreign Exchange (AFEX), a cross-border payment-solutions provider.

AFEX is one of the leading non-bank cross-border payment-solution providers across the globe. It processes global payments in more than 100 currencies. It serves more than 35,000 customers and generates more than $22 billion in annual volume.

Subject to regulatory approval and standard closing conditions, the deal is anticipated to close in the first quarter of 2021.

How Will FLEETCOR Benefit?

AFEX offers flexible cross-border payment solutions which help small-and medium-sized businesses grow internationally, irrespective of currency barriers. The company focuses on providing international accounts payables products for businesses which are not adequately served by banks.

The deal is expected to enhance FLEETCOR’s corporate-payments business and enhance its competitive position in the business-payments industry globally.

Notably, Ron Clarke, chairman and CEO at FLEETCOR, stated, "AFEX is a terrific business, with revenues growing double digits over the last 3 years. Its large European and Asia-Pacific client base complements our existing Cambridge cross-border business, which is more North America focused."

We believe FLEETCOR’s acquisition strategy helps it expand customer base, headcount and operations, diversify its service offerings across industries, and boost revenues.

Zacks Rank and Stocks to Consider

FLEETCOR currently carries a Zacks Rank #3 (Hold).

Some better-rankedstocks in the broader Zacks Business Services sector are FactSet Research (FDS - Free Report) ,IQVIA Holdings (IQV - Free Report) and ICF International (ICFI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected-earnings per share (three to five years) growth rate for FactSet Research, IQVIA Holdings and ICF International is 8.5%, 9.8% and 10%, respectively.

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