WEX Announces Entry Into a $300 Million Accelerated Share Repurchase Agreement
WEX Inc. (NYSE: WEX) has announced its entry into a $300 million accelerated share repurchase (ASR) agreement with JPMorgan Chase Bank. This move is part of WEX's existing $1.05 billion amended share repurchase authorization announced in February 2024. The ASR involves an initial delivery of approximately 1.3 million shares of WEX's common stock, representing about 80% of the total expected repurchase. The final number of shares will be determined based on the average daily volume-weighted average prices during the ASR term. This initiative reflects WEX's confidence in its intrinsic value and long-term growth potential, aligning with its capital allocation strategy to invest in future growth while delivering value to shareholders.
WEX Inc. (NYSE: WEX) ha annunciato la sua partecipazione a un accordo di riacquisto accelerato di azioni (ASR) da 300 milioni di dollari con JPMorgan Chase Bank. Questa mossa fa parte dell'attuale autorizzazione al riacquisto di azioni di WEX, che ammonta a 1,05 miliardi di dollari e annunciata a febbraio 2024. L'ASR prevede una consegna iniziale di circa 1,3 milioni di azioni ordinarie di WEX, che rappresentano circa l'80% del totale previsto per il riacquisto. Il numero finale di azioni sarà determinato in base ai prezzi medi ponderati per volume durante il periodo dell'ASR. Questa iniziativa riflette la fiducia di WEX nel suo valore intrinseco e nel potenziale di crescita a lungo termine, allineandosi alla sua strategia di allocazione del capitale per investire nella crescita futura, offrendo al contempo valore agli azionisti.
WEX Inc. (NYSE: WEX) ha anunciado su entrada en un acuerdo de recompra de acciones acelerada (ASR) por 300 millones de dólares con JPMorgan Chase Bank. Este movimiento forma parte de la autorización de recompra de acciones revisada de WEX, que asciende a 1.05 mil millones de dólares y fue anunciada en febrero de 2024. El ASR implica una entrega inicial de aproximadamente 1.3 millones de acciones ordinarias de WEX, representando alrededor del 80% del total esperado de recompra. El número final de acciones se determinará en base a los precios promedio ponderados por volumen durante el período del ASR. Esta iniciativa refleja la confianza de WEX en su valor intrínseco y su potencial de crecimiento a largo plazo, alineándose con su estrategia de asignación de capital para invertir en el crecimiento futuro mientras se ofrece valor a los accionistas.
WEX Inc. (NYSE: WEX)는 JPMorgan Chase Bank와 3억 달러 규모의 가속 주식 매입(ASR) 협정을 체결했다고 발표했습니다. 이 조치는 2024년 2월에 발표된 WEX의 총 10억 5천만 달러 규모의 수정된 주식 매입 승인에 포함됩니다. ASR은 약 130만 주의 WEX 보통주를 최초로 인도하는 것으로, 이는 예상되는 총 매입의 약 80%에 해당합니다. 최종 주식 수는 ASR 기간 동안의 평균 일일 거래량 가중 평균 가격을 기준으로 결정됩니다. 이 이니셔티브는 WEX가 자신의 본질적인 가치와 장기적인 성장 가능성에 대한 신뢰를 반영하며, 향후 성장을 투자하는 자본 배분 전략과 일치하여 주주에게 가치를 제공하고자 합니다.
WEX Inc. (NYSE: WEX) a annoncé son entrée dans un accord de rachat d'actions accéléré (ASR) de 300 millions de dollars avec JPMorgan Chase Bank. Ce mouvement fait partie de l'autorisation de rachat d'actions modifiée de 1,05 milliard de dollars annoncée en février 2024. L'ASR implique une livraison initiale d'environ 1,3 million d'actions ordinaires de WEX, représentant environ 80 % du rachat total prévu. Le nombre final d’actions sera déterminé en fonction des prix moyens pondérés par le volume quotidien pendant la durée de l'ASR. Cette initiative reflète la confiance de WEX dans sa valeur intrinsèque et son potentiel de croissance à long terme, s'alignant avec sa stratégie d'allocation de capital pour investir dans la croissance future tout en offrant de la valeur aux actionnaires.
WEX Inc. (NYSE: WEX) hat seinen Eintritt in eine 300 Millionen Dollar umfassende beschleunigte Aktienrückkaufvereinbarung (ASR) mit der JPMorgan Chase Bank bekannt gegeben. Dieser Schritt ist Teil der bestehenden Autorisierung für den Aktienrückkauf in Höhe von 1,05 Milliarden Dollar, die im Februar 2024 angekündigt wurde. Der ASR umfasst eine anfängliche Lieferung von etwa 1,3 Millionen Aktien von WEX, was etwa 80% des insgesamt erwarteten Rückkaufs entspricht. Die endgültige Anzahl der Aktien wird auf Basis der durchschnittlichen täglichen volumengewichteten Preise während des ASR-Zeitraums bestimmt. Diese Initiative spiegelt WEXs Vertrauen in seinen inneren Wert und sein langfristiges Wachstumspotenzial wider und stimmt mit seiner Kapitalallokationsstrategie überein, in zukünftiges Wachstum zu investieren und gleichzeitig den Aktionären Wert zu bieten.
- Demonstrates confidence in company's intrinsic value and growth potential
- $300 million commitment to share repurchase, potentially boosting EPS
- Part of a larger $1.05 billion share repurchase authorization
- Aligns with strategy to invest in growth while returning value to shareholders
- Expected to be completed in Q4 2024, showing near-term execution
- Large cash outlay of $300 million may impact available funds for other investments
- Share repurchase benefits may be offset if stock price declines
Insights
WEX's announcement of a
- Immediate Impact on Share Price: The initial repurchase of approximately 1.3 million shares (about
3.2% of outstanding shares) is likely to provide short-term support for the stock price. - Financial Flexibility: The ability to execute such a large repurchase indicates robust cash flow and a strong balance sheet, which is particularly noteworthy in the current economic climate.
- Shareholder Value: By reducing the number of outstanding shares, WEX is potentially increasing earnings per share (EPS) and return on equity (ROE) for remaining shareholders.
- Market Perception: This move may be interpreted as management's belief that the stock is undervalued, which could attract more investor interest.
However, investors should also consider potential drawbacks:
- Opportunity Cost: The
$300 million used for share repurchases could have been allocated to strategic investments, acquisitions, or debt reduction. - Timing Risk: If the stock price rises significantly during the ASR period, WEX may end up repurchasing fewer shares than initially anticipated.
Overall, this ASR agreement appears to be a positive signal for WEX's financial health and management's outlook, but investors should monitor how effectively the company balances shareholder returns with long-term growth investments.
WEX's decision to enter into a
- Market Timing: With the S&P 500 near all-time highs, WEX's choice to repurchase shares now could be seen as a vote of confidence in both the company's valuation and the broader market stability.
- Sector Performance: The financial technology sector has been experiencing significant growth and transformation. WEX's move may be interpreted as a signal of its strong positioning within this competitive landscape.
- Investor Appetite: In the current low-yield environment, investors are increasingly favoring companies that return capital to shareholders. This ASR could make WEX more attractive to value-oriented investors.
- Competitive Positioning: By demonstrating financial strength through this repurchase program, WEX may be aiming to differentiate itself from competitors and potentially deter acquisition attempts.
However, there are some market-related considerations to keep in mind:
- Economic Uncertainty: With ongoing concerns about inflation and potential economic slowdowns, some investors might prefer to see cash preserved for operational flexibility.
- Industry Disruption: The rapid pace of innovation in fintech could require significant capital for future investments. Investors should assess whether this share repurchase might limit WEX's ability to respond to emerging opportunities or threats.
In conclusion, while the ASR is likely to be well-received by the market in the short term, its long-term impact will depend on WEX's ability to continue delivering strong operational performance and navigating the evolving fintech landscape.
“Entering into this ASR reflects our confidence and belief in WEX’s intrinsic value and long-term growth potential, underpinned by our strong revenue and earnings growth profile and our expectations for our future cash generation,” said Melissa Smith, WEX’s Chair, Chief Executive Officer, and President. “We remain committed to our capital allocation strategy, which allows us to invest in our future growth while simultaneously driving additional value to our shareholders through opportunistic share repurchases.”
Under the ASR, WEX will make an initial payment of
About WEX
WEX (NYSE: WEX) is the global commerce platform that simplifies the business of running a business. WEX has created a powerful ecosystem that offers seamlessly embedded, personalized solutions for its customers around the world. Through its rich data and specialized expertise in simplifying benefits, reimagining mobility and paying and getting paid, WEX aims to make it easy for companies to overcome complexity and reach their full potential. For more information, please visit www.wexinc.com.
Forward-Looking Statements
This press release contains forward-looking statements including, but not limited to, statements about management’s plans, goals and expectations with respect to the accelerated share repurchase transaction. Any statements in this press release that are not statements of historical facts are forward-looking statements. When used in this press release, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “positions,” “confidence,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements relate to our future plans, objectives, expectations, and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or performance to be materially different from future results or performance expressed or implied by these forward-looking statements, including a change in the Company's ability to effectuate or realize the benefits of the accelerated share repurchase transaction as currently planned; as well as other risks and uncertainties identified in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 23, 2024 and subsequent filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release and undue reliance should not be placed on these statements. The Company disclaims any obligation to update any forward-looking statements as a result of new information, future events, or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240729827513/en/
News media:
WEX
Julie Lydon, 415-816-9397
Julie.Lydon@wexinc.com
Investor:
WEX
Steve Elder, 207-523-7769
Steve.Elder@wexinc.com
Source: WEX
FAQ
What is the value of WEX's accelerated share repurchase agreement?
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When is the final settlement of WEX's ASR expected to be completed?
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