back Back

Wex enhances financial flexibility with $400 mn investment & amendments to credit agreement

By Pavithra R

July 01, 2020

Share

Melissa Smith, WEX’s Chair and Chief Executive Officer

WEX, a leading FinTech service provider, has announced that the firm has agreed to a $400 M investment from an affiliate of Warburg Pincus. The company has also obtained an amendment to its existing senior secured credit facilities, providing WEX with increased financial flexibility.

The investment includes convertible notes in an aggregate principal amount of $310 M and $90 M in common stock through a private placement (subject to customary closing conditions). The combination of the investment and the credit agreement amendment is expected to strengthen WEX’s financial profile and enable the company to remain focused on its strategic initiatives amid the global pandemic.

“We are pleased to further fortify our balance sheet during the current uncertain operating environment while reaffirming our relationship with Warburg Pincus, who has demonstrated their strong commitment to the future growth of WEX. The combination of this investment and the recent credit agreement amendment put us in an even stronger financial position with additional financial flexibility, improved liquidity and increased cash on hand. This better positions us to remain focused on our long-term strategic initiatives to drive our future success, and capitalize on the economic recovery when market conditions improve,” said Melissa Smith, WEX’s Chair and Chief Executive Officer.

Amendment of Credit Facility:

  • Increases the current maximum Consolidated Leverage Ratio to 5.5X through 12/31/2020 and stepping down thereafter
  • Permits an unlimited amount of corporate cash to be netted from the financing debt balance for financial covenant purposes following the closing of the Private Placement for up to 6 months following resolution of the eNett and Optal transaction and permanently increases the amount of cash netting allowed to $250 M if the eNett and Optal transaction does not close or $400 M if it does close
  • Adds a fourth pricing tier in the case that leverage exceeds 5.5X at Libor plus 3% and introduces a Libor floor on revolving credit facility borrowings of 75 basis points

“We are honored to once again invest behind the strong management team at WEX to further support its long-term commitment to market leadership, innovation and growth. Given our deep familiarity and relationship with the company, we are confident WEX has the capabilities and resources to emerge from the current environment stronger than ever,” said Chandler Reedy and Stephanie Geveda, Managing Directors at Warburg Pincus.

Wex has also amended and restated the debt commitment letter entered into in connection with the eNett and Optal transaction. The firm has also received additional financial covenant relief to the Consolidated Leverage Ratio and Coverage Ratio in the Credit Agreement Amendment in connection with the eNett and Optal transaction.

Established since 1983, Wex is a leading financial technology service provider simplifying the complexities of payment systems across continents and industries including fleet, corporate payments, and health.

Previous Article

July 01, 2020

Capital raises $9 mn to enhance its AI-based ‘The Capital Machine’

Read More
Next Article

July 01, 2020

FinTech Klarna launches in Spain with ‘Pay in 3’ solution

Read More






IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

Today

SEB Embedded goes live with Thought Machine to drive BaaS innovation

Read More

October 29, 2024

Afin Bank and Thought Machine launch digital bank for Africans in the UK

Read More

October 22, 2024

Tuum partners with Google Cloud to deliver core banking in EMEA

Read More

Related Reports

Sales League Table Report 2024
Know More
Global Digital Banking Vendor & Landscape Report Q3 2024
Know More
NextGen WealthTech: The Trends To Shape The Future Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q1 2024
Know More