- WEX announced a considerably lowered purchase price for eNett/Optal, easing investor concerns around a potential dilution scenario.
- The strategic rationale makes sense, and although the accretion timeline has been pushed out, a net neutral impact seems favorable considering the COVID-19-impacted backdrop.
- However, with a levered balance sheet post-acquisition limiting M&A options, it remains unclear if/how management will hit its longer-term growth targets.
- With the valuation also already pricing in much of the positives, I am neutral on WEX shares.
For further details see:
WEX Inc: Staying On The Sidelines Despite A Favorable eNett/Optal Deal Outcome