Business Acquisitions

6 Months Ended

Jun. 30, 2011

Business Acquisitions

Business Acquisitions

2. Business Acquisitions

     Acquisition of RD Card Holdings Australia Pty Ltd.

     On September 14, 2010, the Company, through its wholly-owned subsidiary, Wright Express Australia Holdings Pty Ltd, completed its acquisition of all of the outstanding shares of RD Card Holdings Australia Pty Ltd. from RD Card Holdings Limited and an intra-group note receivable from RD Card Holdings Limited (the "ReD Transaction"). This acquisition extends the Company's international presence and provides global revenue diversification. Consideration paid for the transaction was $360,300 Australian Dollars ("AUD") (which was equivalent to approximately $336,300 U.S. dollars at the time of closing). This consideration included $6,500 AUD the Company paid for working capital adjustments. The purchase price and related allocations for the ReD Transaction were revised during the first and second quarters of 2011 as the Company finalized its working capital adjustments and valuation of intangible assets. The prior year's amortization was adjusted by $250 in the current period for the effects of the change in intangible asset valuation. The final purchase price and related allocations for a portion of the ReD Transaction have yet to be finalized as the Company is currently in the process of completing its valuation of certain liabilities assumed and the related tax impact as part of the acquisition.

     The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired:

	Preliminary Purchase Price
	Allocation
	June 30,			December 31,
$ USD	2011			2010
Consideration paid (net of cash acquired)	$	336,260		$	339,994
Less:
Accounts receivable		91,487			91,638
Accounts payable		(50,534	)		(50,534	)
Other tangible assets, net		407			1,970
Software		11,526			10,986
Patent		3,086			2,869
Customer relationships		70,723			73,939
Brand name		5,470			5,374
Recorded goodwill	$	204,095		$	203,752

     The following represents unaudited pro forma operational results as if Wright Express Australia had been included in the Company's condensed consolidated statements of operations as of the beginning of the fiscal years:

	Three		Six
	months		months
	ended		ended
	June 30,		June 30,
$ USD	2010		2010
Net revenue	$	106,575	$	204,567
Net income	$	30,134	$	48,148
Pro forma net income per common share:
Net income per share — basic	$	0.78	$	1.25
Net income per share — diluted	$	0.77	$	1.23

     The pro forma financial information assumes the companies were combined as of January 1, 2010, and includes business combination accounting effects from the acquisition including amortization charges from acquired intangible assets, interest expense for debt incurred in the acquisition and net income tax effects. The pro forma results of operations do not include any cost savings or other synergies that may result from the acquisition or any estimated costs that have been or will be incurred by the Company to integrate Wright Express Australia. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2010.

     Acquisition of rapid! Financial Services LLC.

     On March 31, 2011, the Company acquired certain assets of rapid! Financial Services LLC ("rapid!") for approximately $18,000 including an estimate of contingent consideration for future performance milestones of $10,000. rapid! is a provider of payroll debit cards, e-paystubs and e-W-2s, and is focused on small and medium sized businesses. The Company purchased rapid! to expand its purchase card product offerings. The operations of rapid! are included in the Other Payment Solutions segment. During the first quarter of 2011, the Company allocated the purchase price of the acquisition based upon a preliminary estimate of the fair values of the assets acquired and liabilities assumed. During the second quarter of 2011, the estimated valuation of intangibles was revised to increase acquired intangible assets by $2,300, while goodwill was decreased by the same amount. These valuations of intangible assets are still based on a preliminary assessment.

     A contingent consideration agreement was entered into in connection with the purchase of rapid!. Under the terms of the agreement the former owners of rapid! will receive additional consideration based upon the achievement of certain performance criteria, measured over the twelve-month period from the date of purchase. The payment is anticipated to be made during the second quarter of 2012.

     The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired:

	Preliminary Purchase Price
	Allocation
	June 30,			March 31,
	2011			2011
Consideration paid (including estimated $10,000, contingent consideration)	$	18,081		$	18,081
Less:
Accounts receivable		75			75
Accounts payable		(85	)		(85	)
Other tangible assets, net		105			105
Customer relationships (a)		4,600			3,597
Trade name		1,300			—
Recorded goodwill	$	12,086		$	14,389

^(a) Weighted average life — 4.7 years.

     No pro forma information for 2010 has been included in these financial statements as the operations of rapid! for the period that they were not part of the Company, are not material to the Company's revenues, net income and earnings per share.