Summit and Bain reduce stakes in FleetCor

The company, led by CEO Ron Clarke, bought back a portion of its shares from the two firms. To date, Summit’s total return on its FleetCor investment is more than 10x.

FleetCor, a global provider of fuel cards and workforce payment products to businesses, has paid its shareholders, including Summit Partners and Bain Capital, a little more than $200 million in a share buyback.

The two firms’ stakes in the company were reduced, but both retain small positions in FleetCor.

Summit, which first invested in FleetCor in 2002, saw its 17.8 percent stake in the company reduced to 12.58 percent in the transaction, according to a filing with the Securities and Exchange Commission. Bain, which retains an 8.69 percent stake, was reduced to 5.13 percent, the filing said.

Ron Clarke

FleetCor funded the stock re-purchase using proceeds from its credit facilities, according to a press release. The share re-purchase happened concurrently with a separate offering of 4.5 million shares in FleetCor, which was underwritten by Citigroup.

FleetCor’s total debt load stands at just over $1 billion, according to the SEC filing. The company’s total cash flow as of 30 September, 2012, was just over $300 million and its earnings before interest, taxation, depreciation and amortisation for the nine months ending 30 September, 2012, was $268.1 million, the filing said.

Summit’s gain on FleetCor, led by CEO Ron Clarke, has been about $1 billion on an initial investment in 2002 of about $45 million. The firm also made an interim investment in the company from its subordinated debt fund, and a subsequent equity investment from a different fund in 2009 that allowed the company to make a key add-on acquisition. The firm’s overall return on its total investment in FleetCor is more than 10x its money, according to a person with knowledge of the transaction.

Bain Capital and Summit Partners did not respond to requests for comment.

Private Equity International took an in-depth look into Summit's operations, including the FleetCor investment, in the November issue. Premium subscribers can access the article here.