On March 3, 2007, Wright Express Corp., headquartered in South Portland, Maine announced it finalized the acquisition of Pacific Pride Services, Inc. for approximately $32 million in cash. In announcing the acquisition, Wright Express noted that it expected to increase its penetration of the distributor channel by leveraging Pacific Pride’s local market presence and brand recognition, as well as its platform and products for commercial vehicle fleets.
“Over the past two years Wright Express has made a large investment in developing a state-of-the-art distributor payment processing and information platform for Pacific Pride, and we are pleased to be taking this relationship to the next level,” noted Michael Dubyak, president and chief executive officer of Wright Express in the release. “A pioneer in card lock fueling, Pacific Pride has built a great reputation for service and a broad nationwide network of fueling sites.”
The distributors in Pacific Pride’s franchise network are also seen to represent a cross-selling opportunity for Wright Express’ TelaPoint business that provides fuel distributors with a comprehensive solution that spans everything from management of fuel inventory at their bulk and retail sites to payment processing and purchasing controls for their fleet customers.
Pacific Pride’s franchise network encompasses over 330 independent fuel franchisees. The company’s network of independent commercial card lock fueling sites processes approximately 32 million fleet card transactions annually. Pacific Pride was founded in 1984 and is headquartered in Salem, Ore.
Pacific Pride franchisees issue their own Pacific Pride commercial fueling cards to fleet customers. These cards provide access to fuel at more than 1,000 Pacific Pride and strategic partner locations in the U.S. and Canada. Pacific Pride provides a variety of services to franchisees including training, marketing, advertising, network operations and financial settlement between franchisees.
In general areas like fee structure and branding both operations will function much as before with little noticeable difference to their respective customers.
However, a number of synergies will be realized as a result of the acquisition that will impact the marketers and retailers using their programs. In order to get a deeper perspective on what this acquisition means for marketers involved with each program, NPN conducted an interview with Pacific Pride President Cindy Condon and Fred Madeira, Wright Express vice president responsible for the small business marketplace.
NPN: What was the genesis of this acquisition, and do you see room for overlap at the marketer/jobber level?
Madeira: Wright Express and Pacific Pride both started about 25 years ago. Both focused on servicing companies with vehicles. We both build value propositions around control, convenience and security and both focused on saving fuel costs for commercial fleets. However, we took very different paths in how we delivered that to our customers. The Wright Express approach focused on getting a retail network established to accept our cards, and now we have 160,000 accepting sites. Pacific Pride’s approach was very different in that they knew they could drive a lot of volume through card lock sites and they built a tremendously successful network with that model. The ability for us to bring that together was exciting.
Condon: There certainly is overlap. We have many Pacific Pride marketers that have their card lock sites and that have operated their commercial fueling separate from their retail operations because there was no cross acceptance until recently. That was our first initiative with Wright Express several years ago to provide more access into those retail sites, and this is the natural evolution of that effort. Our marketers began using their retail sites to service their commercial customers about a year and a half ago and that was pretty successful, and we hope it becomes even more successful in the future.
NPN: What type of technology/back office synergies come from this acquisition?
Condon: One of the things that is really exciting from the Pacific Pride perspective is we’ve always dealt with the market where we’ve established the network, but our customers have provided their own back end. One of the reasons we began our involvement with Wright Express three years ago was to be able to offer our customers different service levels, and we can now offer two additional service levels that include billing and reporting. And, we have two additional service levels under development.
NPN: In general, what is the fleet fueling services market like today with the high fuel prices?
Madeira: We’re seeing small business concerned about their total cost of fuel and they are really reaching out to us. They recognize the need to control costs, and they need a program that will work affectively for them and their drivers. So there is a lot of activity right now.
Condon: Where the acquisition itself is concerned, one of the things we see, and that our sales staff has seen, is a willingness for marketers to take another look at Pacific Pride because of our ability to integrate card lock and retail in a preauthorized transaction across a broader array of sites and at a higher service level. (And now we have) receivables management and doing all of the back room — except funding the receivable — and then a payment management feature that basically provides the marketer the ability to have their transaction processed through Wright Express and not worry about the receivables aspect.
NPN: How does this relationship enhance customer marketing support?
Madeira: One thing we’re really excited about is Pacific Pride has a great industry reputation the franchisees are highly engaged, they are good business people and they understand the value of the local commercial fleet. We recognize that getting to the local fleet is a real strength that Pacific Pride brings to the table, and we are really excited about that.
On our end, we have invested a tremendous amount of effort throughout our history –money and intellectual capital – in how to best market to businesses that are interested in a fleet program. We’ve done a lot of creative and unique things in that environment to drive an excellent response rate, and we are expecting that to work with our partners at Pacific Pride and their franchisees.