Summit Partners Fleetcor a
Private Equity and Investment Banking
SPRING 2010
Summit Partners FleetCor A
1. Summarize the proposed transaction: Summit Partners proposes to FleetCor Technologies (later preferred as “FleetCor” or the “Company”) an investment into FleetCor for the total amount of $44.9 million in return for a post transaction ownership of 54.2% in the “Company” and coming down to 46% ownership in the company after newly created stock options for management equivalent to 15% ownership in the company has been completely executed and fully diluted. This investment is in the form of convertible preferred stock with an 8% accrued interest, compounding annually. As the transaction come through, Summit’s prefer stock will be treated equal-footing in liquidity with the other $37.5 million of existing preferred stock.
The proceeds from Summit’s investment will be used as followings: • $9.0 million will be used to redeem part of a $15 million subordinated debt held by current investors. The remaining $6 million of this debt will be converted by the current investors into the same strip of prefer stock which Summit proposes. • About $16.6 million will be used as an upfront cash to buy back FleetCor’s seven “Super Licensees” • The remaining $19.3 million will be used as a general working capital for FleetCor to fund its growing business and to buy back any other potential licensees.
2. Discuss five key investment strengths: ➢ FleetCor’s management team: very well-performed management team consisting of: • Very high quality profile and experienced CEO, Ron Clarke, who has brought FleetCor back on track after just 18 months of working in the company. • Other executives who have many experiences and a lot of knowledge in the industry including H. Steve Smith, Senior VP of Sales and Marketing; Tommy Andrews, Senior VP of Operation; and Scott Ruoff, Senior VP of Business Development.
➢ FleetCor has a highly
SPRING 2010
Summit Partners FleetCor A
1. Summarize the proposed transaction: Summit Partners proposes to FleetCor Technologies (later preferred as “FleetCor” or the “Company”) an investment into FleetCor for the total amount of $44.9 million in return for a post transaction ownership of 54.2% in the “Company” and coming down to 46% ownership in the company after newly created stock options for management equivalent to 15% ownership in the company has been completely executed and fully diluted. This investment is in the form of convertible preferred stock with an 8% accrued interest, compounding annually. As the transaction come through, Summit’s prefer stock will be treated equal-footing in liquidity with the other $37.5 million of existing preferred stock.
The proceeds from Summit’s investment will be used as followings: • $9.0 million will be used to redeem part of a $15 million subordinated debt held by current investors. The remaining $6 million of this debt will be converted by the current investors into the same strip of prefer stock which Summit proposes. • About $16.6 million will be used as an upfront cash to buy back FleetCor’s seven “Super Licensees” • The remaining $19.3 million will be used as a general working capital for FleetCor to fund its growing business and to buy back any other potential licensees.
2. Discuss five key investment strengths: ➢ FleetCor’s management team: very well-performed management team consisting of: • Very high quality profile and experienced CEO, Ron Clarke, who has brought FleetCor back on track after just 18 months of working in the company. • Other executives who have many experiences and a lot of knowledge in the industry including H. Steve Smith, Senior VP of Sales and Marketing; Tommy Andrews, Senior VP of Operation; and Scott Ruoff, Senior VP of Business Development.
➢ FleetCor has a highly