On January 24, 2020, the Company entered into a purchase agreement to purchase eNett, a leading provider of business-to-business payments solutions to the travel industry and Optal, a company that specializes in optimizing business-to-business transactions, for an aggregate purchase price comprised of approximately $1.3 billion in cash and 2.0 million shares of the Company’s common stock and subject to certain working capital and other adjustments as described in the purchase agreement. The parties’ obligations to consummate the acquisition are subject to customary closing conditions, including regulatory approvals and the absence of a material adverse effect.

The Company has analyzed the eNett and Optal situation closely with specialist advisors and has concluded that the COVID-19 pandemic and conditions arising in connection with it have had, and continue to have, a material adverse effect on the businesses, which is disproportionate to the effect on others in the relevant industry. Because of this material adverse effect, WEX has advised eNett and Optal that it is not required to close the transaction pursuant to the terms of the purchase agreement.

As of March 31, 2020, the purchase accounting was final for Go Fuel Card, Discovery Benefits, Pavestone and Noventis. No adjustments to the purchase accounting were required or made during the three months ended March 31, 2020. In both the three months ended March 31, 2020 and 2019, the acquisition and merger related costs related to the completed business combinations were immaterial.

On July 1, 2019, the Company acquired Go Fuel Card, a European fuel card business, for a total purchase price of €235.0 million (equivalent of $266.0 million on date of purchase). This acquisition, which was funded with cash on hand, was accounted for as a business combination. The purpose of the acquisition was to strengthen the Company’s position in the European market, grow its existing customer base and reduce its sensitivity to retail fuel prices, resulting in the recording of goodwill. The goodwill associated with the acquisition of Go Fuel Card is deductible for tax purposes.



(In thousands)
Total consideration, net of $5,589 in cash acquired	$	260,455

Less:
Network relationships^{(a) (d)}	112,893
Customer relationships^(b)(d)	33,963
Brand name^{(c) (d)}	442
Deposits	(5,169		)
Accrued expenses	(420		)
Recorded goodwill	$	118,746

No pro forma information has been disclosed in these financial statements as the operations of Go Fuel Card 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.

On March 5, 2019, the Company acquired Discovery Benefits, an employee benefits administrator, for a total purchase price of $526.1 million, of which $50 million was paid during the fourth quarter of 2019. The acquisition was primarily funded with cash on hand and through borrowings under the 2016 Credit Agreement. The seller of Discovery Benefits obtained a 4.9 percent equity interest in the newly formed parent company of WEX Health and Discovery Benefits, which constitutes the U.S. Health business. The fair value of the equity interest was determined to be $100.0 million on the acquisition date. See Note 13, Redeemable Non-Controlling Interest, for further information.

The purpose of this acquisition was to obtain the comprehensive suite of products and services for the Company’s partners and customers and to open go-to-market channels to include consulting firms and brokers in its Health and Employee Benefit Solutions segment. This acquisition has been accounted for as a business combination, resulting in the recording of goodwill. The majority of the associated goodwill is deductible for tax purposes.



(In thousands)
Cash consideration, net of $125,865 in cash and restricted cash acquired	$	300,191
Fair value of redeemable non-controlling interest	100,000
Total consideration, net of cash and restricted cash acquired	$	400,191
Less:
Accounts receivable	10,722
Property and equipment	4,904
Customer relationships^(a)(d)	213,600
Developed technologies^(b)(d)	38,900
Trademarks and trade names^(c)(d)	13,800
Other assets	13,601
Accounts payable	(3,071		)
Accrued expenses	(7,563		)
Restricted cash payable	(125,346		)
Deferred income taxes	(21,941		)
Other liabilities	(9,814		)
Recorded goodwill	$	272,399

On February 14, 2019, the Company acquired Pavestone Capital, a recourse factoring company that provides working capital to businesses, for a purchase price of $28.0 million, net of cash acquired. This acquisition, which was funded with cash on hand, has been accounted for as a business combination. The Company purchased Pavestone Capital to complement its existing factoring business. As a result, the purchase price is primarily allocated to goodwill, accounts receivable and customer relationships in amounts of $9.5 million, $14.9 million and $3.9 million, respectively. The goodwill associated with this acquisition is deductible for tax purposes. The customer relationships intangible asset has a weighted-average amortization period of 6.5 years.

No pro forma information has been disclosed in these financial statements as the operations of Pavestone Capital 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.

On January 24, 2019, the Company acquired Noventis, a long-time customer and electronic payments network focused on optimizing payment delivery for bills and invoices to commercial entities, for $338.7 million, which was primarily funded with cash on hand and through borrowings under the 2016 Credit Agreement. Excluded from the consideration was $5.5 million paid to certain Noventis shareholders who held unvested option awards at the acquisition date. The modification of these awards to accelerate the vesting resulted in the Company recording this expense as general and administrative expense in its unaudited condensed consolidated statements of operations for the three months ended March 31, 2019.

The Company purchased Noventis to expand its reach as a corporate payments supplier and provide more channels to billing aggregators and financial institutions in our Travel and Corporate Payment Solutions segment. This acquisition was accounted for as a business combination, resulting in the recording of goodwill. The goodwill associated with this acquisition is not deductible for tax purposes.



(In thousands)
Total consideration, net of $44,947 in cash acquired	$	293,767

Less:
Accounts receivable	22,134
Property and equipment	549
Network relationships^{(a) (c)}	100,900
Developed technologies^{(b) (c)}	15,000
Other assets	2,379
Accounts payable	(33,521		)
Deferred income taxes	(21,194		)
Other liabilities	(2,367		)
Recorded goodwill	$	209,887

The pro forma information below gives effect to the Discovery Benefits and Noventis acquisitions as if they had been completed on January 1, 2018. These pro forma results have been calculated after applying the Company’s accounting policies, adjustments to reflect amortization associated with intangibles acquired and interest expense associated with the incremental borrowings under the 2016 Credit Agreement used to fund the acquisitions and related income tax results. The pro forma financial information is presented for comparative purposes only, based on certain estimates and assumptions, which the Company believes to be reasonable but not necessarily indicative of future results of operations or the results that would have been reported if the acquisitions had been completed on January 1, 2018.



(In thousands, except per share data)	Three Months Ended March 31, 2019
Total revenues	$	400,982
Net income attributable to shareholders	$	18,810
Net income attributable to shareholders per share:
Basic	$	0.44
Diluted	$	0.43