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PURCHASE, N.Y. & ATLANTA - Mastercard has solidified its relationship with Corpay by becoming a minority investor in the payment company’s cross-border division. The partnership, announced Monday, aims to enhance the suite of cross-border payment solutions available to Mastercard’s financial institution customers.
The investment of $300 million secures approximately a 3% equity stake in Corpay’s cross-border business, valuing the unit at $10.7 billion, or a 20x forward EBITDA multiple. This valuation appears aligned with Corpay’s current market metrics, as InvestingPro data shows the company trading at an EV/EBITDA ratio of 13.7x, with additional ProTips available for subscribers regarding the company’s valuation multiples.
This collaboration positions Corpay as the exclusive provider of currency risk management and large-ticket cross-border payments solutions to Mastercard’s financial institution clients. Additionally, it extends the companies’ long-standing virtual card collaboration, with Corpay now exclusively offering Mastercard virtual card programs. The partnership comes as Corpay demonstrates solid financial performance, with revenue growth of 5.8% and a robust free cash flow yield of 8% in the last twelve months.
Mastercard Move, a service known for small transaction disbursements and remittances, will expand its offerings to a broader range of small and mid-sized businesses, including Corpay’s existing customer base.
Raj Seshadri, Chief Commercial Payments Officer at Mastercard, highlighted the partnership’s role in expanding Mastercard’s presence in the B2B payments arena, particularly for non-carded transactions. Meanwhile, Ron Clarke, Chairman and CEO of Corpay, expressed enthusiasm for the investment and partnership, anticipating accelerated revenue growth from financial institutions.
Corpay’s Cross-Border business provides innovative solutions to help manage foreign exchange exposure and process large-scale payments in over 160 currencies. Mastercard Move’s network facilitates payments through various channels, reaching over 10 billion endpoints in more than 200 countries.
The information in this article is based on a press release statement from Mastercard and Corpay. For comprehensive analysis including detailed financial metrics, valuation insights, and expert research reports, visit InvestingPro, where you’ll find in-depth coverage of Corpay and 1,400+ other US stocks.
In other recent news, Corpay, Inc. announced a significant amendment to its Term Loan B credit facility, increasing it by $750 million. This move is part of the company’s strategy to strengthen its balance sheet in preparation for its 2025 capital plan. Corpay reported fourth-quarter earnings that exceeded expectations, with adjusted earnings per share at $5.36, surpassing the analyst consensus of $5.32. However, the company’s revenue fell short, coming in at $1.03 billion compared to the expected $1.06 billion, and its guidance for 2025 also disappointed investors. RBC Capital Markets raised its price target for Corpay to $400 while maintaining a Sector Perform rating, citing strong performance in the corporate payments segment despite challenging macroeconomic conditions. BMO Capital Markets adjusted its price target to $440, maintaining an Outperform rating, while Keefe, Bruyette & Woods increased their target to $445, also keeping an Outperform rating. Both firms acknowledged macroeconomic challenges but noted potential growth opportunities through strategic capital allocation and mergers and acquisitions. Corpay’s corporate payments segment showed notable strength with a 38% year-over-year revenue increase, although other segments underperformed. The company’s earnings outlook for 2025 has been impacted by unfavorable foreign exchange rates, fuel prices, and interest rates.
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