8-KOther EventsExhibits & Filings

CORPAY, INC. 8-K Report, Corporate Update (Dec 17, 2018)

Filed December 17, 2018For Securities:CPAY

Summary

Corpay, Inc. (formerly FleetCor Technologies, Inc.) announced on December 17, 2018, its entry into an accelerated share repurchase (ASR) agreement to buy back $220 million of its outstanding common stock. This significant capital allocation strategy signals management's confidence in the company's valuation and future prospects. Investors should note that a substantial portion of the shares, approximately 85%, are expected to be received shortly after the announcement, on December 18, 2018. The total number of shares repurchased will be determined at the end of the ASR period, which is anticipated to conclude by the end of the first quarter of 2019. The repurchase price will be based on a discount to the volume-weighted average price of the company's stock during this period, which is a common feature of ASR agreements designed to benefit the company. This move is generally viewed positively by investors as it can increase earnings per share and return value to shareholders.

Key Highlights

  • 1Corpay, Inc. (CPAY) announced a $220 million Accelerated Share Repurchase (ASR) program.
  • 2The ASR program aims to repurchase the company's outstanding common stock.
  • 3Approximately 85% of the shares are expected to be repurchased and received by December 18, 2018.
  • 4The total number of shares repurchased will be determined at final settlement, based on a discount to the volume-weighted average price.
  • 5The ASR program is expected to be completed by the end of the first quarter of 2019.
  • 6This action indicates management's belief that the company's stock is undervalued.

Frequently Asked Questions

An Accelerated Share Repurchase (ASR) agreement is a contract between a company and an investment bank where the company agrees to buy back a significant amount of its own stock. The bank typically buys the shares on the open market and delivers them to the company quickly, often within a few days. The final number of shares repurchased and the price are determined at a later date based on the average market price over a specified period, usually with a discount to the company.

Companies typically repurchase shares when they believe their stock is undervalued by the market, or to return capital to shareholders. It can also increase earnings per share (EPS) by reducing the number of outstanding shares.

The repurchase can potentially increase the value of your existing shares by reducing the total number of shares outstanding, which could lead to a higher earnings per share (EPS). However, the ultimate impact depends on various market factors and the company's future performance.

The company anticipates that all repurchases under this ASR program will be completed by the end of the first quarter of 2019.