Steve Greene, EVP Corporate Development and Strategy at Corpay, offers perspective on the M&A landscape in 2025 and the company's strategy for acquiring companies in the coming year.
In this episode of Smarter Payments by Corpay, host Brennan Robison, Director of Corporate Communications, speaks with Steve Greene, Executive Vice President of Corporate Development and Strategy at Corpay. The conversation centers on Corpay’s growth strategy, driven by mergers and acquisitions (M&A), and the company’s plans for 2025.
Key Highlights:
Corpay’s Growth and M&A Legacy:
Over its 20+ years, Corpay has grown from a regional fuel card provider into a global B2B payments giant, fueled by over 100 acquisitions. The company aims for a balance between organic growth (targeting 10% annually) and strategic acquisitions, supported by its strong free cash flow.
M&A Focus Areas:
Notable 2024 Transactions:
Acquisition Strategy:
2025 Outlook and Market Trends:
Greene is optimistic about Corpay’s M&A prospects in 2025, citing a favorable macroeconomic environment and expected reductions in interest rates. The company plans to replicate the success of 2024 by targeting sizable corporate payments acquisitions and refining its portfolio further.
Retaining Seller Legacy:
Corpay’s decentralized model allows acquired companies to maintain a degree of autonomy, preserving their culture and leadership. This approach appeals to founder-led businesses, aligning with their desire for a long-term home for their operations and employees.
The episode concludes with Greene’s confidence in Corpay’s future growth and its ability to execute impactful acquisitions while fostering a collaborative and enduring legacy.
(Music)
Greene tease bite: Our first priority in terms of capital allocation has been and continues to be acquisition. So, it is a key part of how we grow the company.
Robison intro: Corpay… once a regional fuel card provider, is now a multi-billion dollar global B2B payments giant… that growth coming largely from acquisitions, more than 100 over 20 plus years… and more to come. This is Brennan Robison, Director of Corporate Communications at Corpay. On this episode of Smarter Payments by Corpay, we speak with Steve Greene, Executive Vice President, Corporate Development and Strategy, who leads the company’s M&A activities, about the company’s plans for 2025. Here’s our conversation.
Robison: Hey Steve, thank you for your time.
Greene: Great, thanks for inviting me. Appreciate it.
Robison: So, before we jump into the topic of mergers and acquisitions, if you would tell our audience a brief history of your career and your time at Corpay.
Greene: Yeah, I've been at the company for 15 years, and I've had kind of three different types of jobs. So, I started off in actually in our M&A group when I first joined the company. Did that for five years, mostly focused on buying stuff outside of the US. We did a big global push at that time. And then I spent five years running different businesses. I moved to the UK and ran a business we own in the UK for a few years and then came back to the US, ran our one of our North America fuel car businesses. And then I've been in this current job I have, which is head of global M&A and strategy for the last five years.
Robison: And prior to joining Corpay, then FLEETCOR. Tell us a little bit about that time.
Greene: Yeah, was, I kind of had a, I was in private equity for almost 10 years before I came here, so more of a deal background and before that I was a, started my career as a strategy consultant at McKinsey.
Robison: So, let's talk about Corpay and M&A. When you tell the Corpay story, M&A is obviously a very big part of it. If you had to break down the company's growth by organic growth versus M&A, what does that breakdown look like?
Greene: Yeah, look, I think we've been quite acquisitive over the years. We've done over 100 deals. Most of those have gone quite well. But we like to balance it. mean, we try to grow organically the top line kind of 10% a year. That's our stated objective. And then we supplement additional growth above that with M&A. Both are important. We need to grow the company organically because that creates durable earnings growth for people. So, we focus on that. But another great feature of the company is how much free cash flow we generate. And so, our first priority in terms of capital allocation has been and continues to be acquisition. So, it is a key part of how we grow the company.
Robison: So, more than 100 mergers or acquisitions, some larger than others, of course. Notable ones include Comdata in 2014, Cambridge Global Payments 2017, many others. Historically, what makes a company an ideal acquisition target for Corpay?
Greene: Yeah, it's a great question. It's moved a little bit, I would say. So, let me tell you what we find most attractive right now, which is we're most focused on finding and buying corporate payments assets, either domestic payables, companies that fit inside of that business we have here in North America, or cross-border companies. So, corporate payments is by and far the number one priority for us. So, we're on the hunt for all kinds of companies in those two spaces. And then the other thing we're trying to do is add to our vehicle payments business. So, diversify that business to do more things that are related to the vehicle, more than just fuel cards, which is what we obviously started the company doing. things like we bought, you know, assets in EV, we bought a business down in Brazil that does helps consumers with car registrations and pay fines. So, those would be the two areas. Corporate payments, number one, by far, diversifying our vehicle payments business.
Robison: Now there were a few years recently when Corpay was making smaller technology plays, buying companies for their products, as opposed to their large customer base. In 2024, you went back to a kind of a previous strategy. Tell us about that.
Greene: Yeah, I mean, what happened like in post-COVID is it was a pretty crazy time in the M&A space. 2021 was a record M&A year globally by almost a factor of two, so a huge year. And that also drove up prices. And so, when prices go up, it hurts our ability to earn a return on those. And so we focused more on what you said, capability buys in that immediate post-COVID period. So, we bought smaller companies who really helped add to capabilities. We bought them more for what the companies had in terms of assets than what they had in terms of financial profile. They really didn't have much earnings. A lot of those companies we bought. So, that's really why we did that post-COVID. I think we've gone back to what we call wheelhouse deals. So, these are companies that contribute. We're really buying companies so we can have more earnings. And that help advance one of our businesses, whether it's a quarter payments business or one of the vehicle payments businesses. So, we're back to these wheelhouse deals, which are right what we do, bigger is better when we're looking at these companies, and we're looking for businesses that help us, you know, accelerate earnings growth into the future.
Robison: So, looking ahead to the future, Corpay, you're very open about your desire to grow and drive shareholder value. What is the company's overall growth plan for 2025 and how does your M&A strategy fit into it?
Greene: Yeah, think it's hopefully we can repeat the success we had in 2024. 2024 will be the really a really good year, I think, for &A for us. It's probably the best year in 10 years. We bought two really great corporate payments assets, one called Paymerang, which is a domestic payables business, another one, GPS, which sits inside of our cross-border business. Those were combined over a billion dollars of capital deployed. And they're really going to contribute meaningfully. think we've told folks it's both of those companies will contribute a couple hundred million dollars of revenue for us in 2025. The other thing we did in 2024 was we divested an asset that was non-core, which is kind of part of our strategic review process that we kicked off a couple of years ago. I think... If we could have another, if I looked at 2025 and could replicate kind of what we did in 2024, it'd be a great year. So, go buy a couple of sizable corporate payments assets, maybe look at the portfolio. We might trim around the edges of things that are non-core for us. But that would be, if we sat here a year from now and that's what we got done in 2025, I'd be pretty happy.
Robison: So, I'm curious when you first identify a company that might be a good acquisition target, what does that initial contact look like? Do you have to do a lot of due diligence before you reach out? How does that work?
Greene: Yeah, I mean, it's a great question. tend to track, look, we're in the space, so we know all the companies. And we stay in touch, we introduce ourselves, we meet the principals, and that kind of courting process can take years and years and years. So, we stay in touch with all the companies in our industry. And look, &A is one these things where it takes two to tango, you need a buyer and a seller who wants to do a deal together and the timing's got to be right for both parties. And so things maybe aren't actionable this year but they will be in two or three years so we like to get to know, we reach out to the people, we get to know them. In some cases, we might enter a commercial partnership with the company to kind of learn a little bit more about them before we might buy them. And so that process can take, it generally takes literally years for us to kind of learn about the company, stay on top of it, and then when the time gets right, I think we've shown that we can move quickly. And obviously we pay fair prices because we've done so many deals. I'd say that's kind of the RMO. And we learn about things a lot of times through businesses or through trading, how everyone does it. But because we're in the businesses and we operate them, we know all the targets to go out.
Robison: And do you use any outside advisors to help with your due diligence.
Greene: We, yes, we do. It depends on, know, M&A's of getting a deal done requires a lot of different parties. We rely on attorneys, we rely on accountants, we relies on tax specialists. In some cases we'll rely on investment bankers too. particularly for selling something, we like to use investment bankers and in select cases on the buy side, use, we'll get some advisors to help us out.
Robison: So, without disclosing anything that isn't public, had there been cases where you thought you liked a company, but then you looked under the hood and it wasn't a great fit and you had to walk away, or maybe the target held out for more than you were willing to pay?
Greene: Yeah, mean, it does happen. That's a little bit of the &A world is you got to, for every deal that we get done, there's a lot of companies that we approach or talk to. mean, it's quite a large universe of opportunities. You have to go chase to get one across the finish line. that's just, I think, a feature not. It's a feature of M&A that you got to kind of have a lot of targets to get one to get one done. So, it does happen. It does happen. But look, that's the game we're in. you know, we try to be active. And the good thing is, I'll go back to the point I made earlier, because we are in the business, we're way more efficient at zeroing in on the issues that matter most to us. We don't do the boil the ocean approach. You know, we have to study every single thing. We tend to be super laser focused on a handful of points that really make the deal or break the deal. And so that, think, it helps us efficiently move through the process. And I think sellers appreciate it because we're not asking them dumb questions or stuff that's irrelevant. We really try to get in on the points that matter the most.
Robison: once you've entered into that business relationship with the company you're talking about and you've seen their books, what is the process for reaching evaluation that you want to offer? Is that art, science, or a little bit of both?
Greene: Yeah, there tends to be a pretty standard, you get initial financial information and you get to know the business a little bit better. And you sign non-disclosure agreements, obviously, because people have to hand us stuff that they don't, you know, that we have to agree not to share with any other parties. And so what tends to happen in the M&A process is you get some initial information and that helps form an initial point of view on valuation. We share that with the principal and is that gonna work for them, yes or no? Here's why we're at that price. And then if we're kind of in the right zip code with each other, then we do more work and we might refine if there's a range, we might get in on a narrow down the range. But it's a pretty standard process for us and because we've done so many deals, think we again try to be... We don't want to waste anyone's time. So, we try to get to the number that makes sense for us. The valuations, I'd say more art than science. It takes into account a lot of things. The one I'd say factor for us might be different from other folks is because we're buying stuff in our space, we tend to have what's called synergies, meaning we have a way of selling more of the product because we have a bigger sales force. Or we have a network that we can do something with that maybe another party wouldn't have. we have cost synergy. We don't need all the back office stuff that the company already has. So, those synergies really allow us to create incremental profit over and above maybe what the company generates today. And in some cases, it helps us offer an attractive price to the principals of the people who are selling the business. So, that's, I think, a pretty unique aspect of who we are as a buyer and when we talk to people, it does allow us, I think, to compete effectively for assets that we want to.
Robison: Sure. So, on previous episodes, we've talked about how Corpay has a federated model where the lines of business operate with a degree of autonomy. Is that a selling point when you're negotiating with a potential target, letting them know that they'll get to retain some of their autonomy, their culture, their leadership?
Greene: Yeah, I think for us, I we always tell people, think a lot of the businesses that we buy are founder led, they're closely held and it's a big decision to sell your company when you're one of those people who's looking to sell it. And so we try to talk to people about making sure that Corp pays a good long-term home for the business that they've built, that we do want to look after their people, we want to carry on the legacy, we want to make the business try to go even better than it has in the past. And so that does, for people who've built businesses and worked super hard to create something, we wanna make sure that we can carry on that legacy and we can be a long-term home. So, it does, I think it does matter to a certain set of buyers who still, sorry, a certain set of sellers who still own and run the business today. It's a very important factor.
Robison: So, do Corpay deals ever include holdbacks where certain conditions have to be met before you make the full payment?
Greene: We do do that. mean it doesn't happen is it's not my favorite thing to do to be honest with you but it does we do have situations maybe where there's the valuation expectations can't be met and so one sometimes there's contingent payments that can be used to kind of bridge those valuation gaps. So, yeah, it does happen. It's a small minority of the cases. I think most people like just, you know, offer us a fair price for 100% and let's be done with it, I think is most sellers preference and frankly, ours as well. So, but yeah, it is a tool to help try to get some deals, you know, across the goal line.
Robison: and you mentioned a lot of your targets are founder-led. How often do the founders stick around? Do they stick around for years? Is that part of the deal that you want their leadership moving forward?
Greene: Yeah, no, it's a very good question. It depends, is the answer. There's no kind of recipe for it. It depends on people's individual situations. So, we've had situations where founder-led businesses, founders stuck around. We acquired a business in Europe a couple years back, and the guys who ran that are still running it and love being in the game with us. And then there are other situations where... the person selling because they're kind of ready to retire. In those situations, they kind of stick around to help with the transition and then they want to go off and spend their money doing other things and retire. So, I'd say we have every, and everything in between, every permutation of in between. Some people stick around for a little bit longer than want to leave. So, we try to tailor the situation and the... the how we're going to run the company after we buy it in a way that's that suits what the management team really wants to do and what their desires are and what works for us obviously.
Robison: Obviously. Historically, have Corpay deals been cash, stock, or something more complicated?
Greene: Yeah, the vast, vast majority of deals are 100 % cash. We've done less than five deals where the consideration has been cash plus something else. That plus something else is typically our equity. So, we don't do that very often. And I think for a lot of people, the... you know, just getting cash. They just want cash. Like at the end of the day, they want to get, they want to get the, the business, have the money wired in their bank account and be off. So, it's, think it's a, and because of our size, we don't have financing contingencies, you know, with other people who we compete against have to raise debt. have, you know, we have, we create a lot of cash and we have, you know, facilities that we have availability, debt facilities where we have availability that we can fund the, the acquisition. So, we don't, we, don't have financing contingencies.
Robison: Sure. So, to wrap up our conversation, if you would describe your level of optimism about Corpay’s M&A prospects for 2025 and beyond.
Greene: Yeah, I'm quite optimistic, I would say. I think 2025 will be, in terms of overall volume, hopefully on par with 2024. The macro environment looks like it's going to be a little more conducive for M&A. A lot of M&A is affected by overall interest rates. And with interest rates starting to come down, I think that'll help spur some activity. And you always look, we have companies out there that we track where I think it'll be time for some kind of transaction. So, look, in closing, I'm quite optimistic that 2025 will be a good year for us, fingers crossed.
Robison: All right, well, we appreciate your time and a bit of a peek into Corpay’s future. Steve Green, Executive Vice President, Corporate Development and Strategy at Corpay. Thanks, Steve.
Greene: Great, thanks Brennan. Appreciate it.
That's it for this episode of Smarter Payments. Thank you for listening. Be sure to follow the show wherever you get your podcasts, so you don't miss an episode. Smarter Payments is a production of Corpay Incorporated, copyright 2025. I'm Brennan Robison. And we'll see you next time.