Payments company Fleetcor Technologies (NYSE:FLT) has reached an agreement with activist investor D.E. Shaw Group to refresh its board and conduct a review to explore strategic alternatives, including the separation of one or more of its businesses. FLT shares gained 6.4% on Monday in reaction to the news, and continued to rise in after-hours trading.
Fleetcor appointed Rahul Gupta, former CEO of RevSpring, a healthcare billing and payments company, to its board. As per its agreement with D.E. Shaw, the company will add a second new director to advance its “Board refreshment process, which is intended to enhance the diversity of the Board and deepen its skill set in technology and financial oversight.”
The company disclosed that one of its long-term directors will retire upon the appointment of a second new director. Note that in January, Fleetcor appointed tech executive Annabelle Bexiga to its board.
Fleetcor to Conduct a Strategic Review
Meanwhile, Fleetcor will be forming an ad hoc Strategic Review Committee to review its portfolio and businesses. The company stated that this review will complement its ongoing business simplification plan. It expects to complete the review by the end of 2023.
While Fleetcor is essentially known to be a payments company, it also operates several other businesses. For instance, it offers fuel solutions to businesses and government entities that operate vehicle fleets and provides lodging solutions in certain geographies.
D.E. Shaw cheered its agreement with Fleetcor and the appointment of the new director. “We are pleased that the Company will explore portfolio alternatives to highlight the strength of each of its underlying businesses with the goal of unlocking substantial value for all shareholders,” said Michael O’Mary, D. E. Shaw’s Managing Director.
D.E. Shaw has previously pushed for changes at logistics firm FedEx (FDX), data analytics and risk assessment firm Verisk Analytics (VRSK), and home improvement retailer Lowe’s (LOW).
Is Fleetcor a Good Stock to Buy?
Wall Street’s Moderate Buy consensus rating for Fleetcor is based on seven Buys and four Holds. The average FLT stock price target of $239 suggests 20% upside potential.
