Wex has entered into a definitive agreement to pay $1.7 billion to acquire virtual travel payments provider eNett from majority owner Travelport and minority equity investor Optal. As part of the deal, Wex also is acquiring Optal, a virtual card issuer formerly known as PSP International.
The deal comes after Travelport was taken private in May 2019 by Siris Capital Group and Evergreen Coast Capital after four years as a publicly traded company. In recent years, eNett—a joint venture Travelport launched in 2009 with Optal, then known as PSP—had been a major growth area for the company, specializing in generating virtual account numbers for payments for hotels and other non-air suppliers. Since 2016, eNett's purchase volume has grown at a compounded rate of 36 percent, according to filings.
That business now will come under the umbrella of Wex, the Portland, Me.-based company founded in 1983 as a fleet card specialist. Over the past several years, Wex steadily has grown its line of corporate payment solutions, including virtual payment products for travel.
Along with bolstering its position in the virtual payment vertical, the acquisition will help Wex grow its presence in Asia/Pacific and Europe—markets where eNett does a significant share of its businesses and where Wex has made several other recent forays. In November 2018, Wex entered Japan via a virtual card issuing pact with Japanese payment network JCB and in 2017 was granted a license from the United Kingdom's Financial Conduct Authority, enabling it to issue credit products across all 31 nations of the European Economic Area via passporting provisions.
For Travelport, the deal furthers a string of corporate changes since the company was taken private, including the appointment as CEO of Greg Webb, former EVP of Travelport competitor Sabre, replacing Gordon Wilson, who had been president and CEO of Travelport since 2011 and was a 28-year company veteran. The possibility of an eNett sale long has been considered a possibility, particularly as Travelport's global share of global distribution system bookings declined against Sabre and Amadeus, and mega travel management company CWT in 2018 sidelined Travelport in favor of those two primary GDS competitors.
Under terms of the deal, Wex will pay $1.275 billion in cash and approximately 2 million shares of common stock to the sellers. The acquisition already has been approved by Wex's board of directors and is expected to close in mid-2020.