It not unreasonable to think that when a truck driver uses his corporate card to fill up on gas or get an oil change, he also charges a Twinkie or maybe a cup of coffee for himself. What’s the big deal?
A million dollar company can afford the extra dollar, right? It adds up. If a fleet of 100 truck drivers each spend one extra dollar a day on the corporate card, that adds up to an extra $36,500 a year. Well, with a $45 million infusion from Summit Partners, FleetCor Technologies is putting an end to the extra spending drivers do.
Geared toward companies that have anywhere from 10 to 100 vehicles, Atlanta-based FleetCor’s technology customizes fleet cards so there is no extra spending by mobile workers. “We are almost the opposite of the Visa handle, It’s everywhere you want to be;’ We get you what you need and that’s it,” says Ron Clarke, FleetCor’s chief executive. “We can code a card to only allow a driver to fill up on diesel gas because that is what his company truck uses. We can code a card to only work during the week because he doesn’t drive for the company on the weekends. We can set so many parameters.”
Summit Partners, which usually makes investments in companies that are one step away from hitting the public markets, instantly knew that FleetCor’s business was one that would flourish in the economic downturn. “There was such a good opportunity here, because middle market companies really need this kind of management,” says John Carroll, a principal with Summit and FleetCor’s newest board member. “It gives these mid-sized businesses purchase control of the fleet and detailed information about what the driver did with the card.”
No New Drivers Here
While this is only FleetCor’s second round of private equity financing, the company has been around for over 16 years. Its first round of private equity, which brought in $10 million, came from Advantage Capital Partners and GCC Investments in 1999.
FleetCor serves over 90,000 companies employing 1 million drivers and has seen double-digit revenue growth for the last 10 years. Additionally, the company is profitable. It seems that FleetCor came back to the private equity pool because it’s looking to grow itself before a Wall Street debut, which will most likely come in about a year and a half.
“It’s not clear how much more money we will need, but needed to do this round so we could acquire some good, big companies,” Clarke says. “We can go back their well multiple times; Summit can invest up to $300 million. We wanted to build with someone that had deep pockets, and Summit was it,” says Clarke.
While it is true that Summit has plenty of cash to fall back on – over $6 billion under management – Carroll says he doesn’t expect FleetCor to need anymore. “We don’t anticipate another round needed. You know us, we invest in the late stage, we anticipate they will execute on their business plans and move toward a public offering in the immediate term,” says Carroll.
The new round will be used to step-up its technology, expand card acceptance, and increaaxse sales-force coverage and make acquisitions. Clarke says he is already close to acquiring a complementary business.
FleetCor’s cards are marketed under a variety of private-label and proprietary brand names, including Fuelman and Gascard.
Danielle Fugazy can be contacted at: Danielle.Fugazy@tfn.com
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