CCS (Fleetcor)

 

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Established in the early 1990s, independent fuel charge card issuer CCS was quick to capitalise on its first-mover advantage, establishing blanket coverage of the petrol stations domestically. The business also secured the number two slot in neighbouring Slovakia.

Having established such a strong market position, CCS presented a highly attractive strategic asset for acquirers looking to gain a regional foothold.  Just one year after Advent’s investment, the business was approached by the Fleetcor, the fastest growing fuel card issuer in the US.

Although it is highly unusual to part company with a business at such an early stage in the investment period, both Advent and the company's management agreed that the fit with FleetCor would be to the long term strategic advantage of the business. 

We retained our involvement in the business by holding a minority shareholding in FleetCor as well as a seat on the board of the group. Fleetcor completed an IPO (NYSE: FLT) in 2010, and in early 2012 Advent made a final exit from its investment.

Why and how we acquired the business

Established in 1991 by a team of entrepreneurs, CCS had quickly grown to become the leading fuel charge card issuer in the Czech Republic with terminals in practically every fuel station in the country. It had also made successful in-roads into adjacent countries, occupying the number two position in Slovakia with 50% market coverage. The business served a blue-chip client base including government agencies, large companies and business fleet operators.

Being the first card issuer in Central and Eastern Europe to issue chip cards, CCS enjoyed a reputation for technical excellence. It had also expanded its core offering into several new service areas designed to help its customers better manage their fleet costs.

Recognising the company’s potential, we made a pro-active approach to the owners. “We believed CCS was an excellent opportunity and through our local team made a connection with the owners and persuaded them to sell,” explains Chris Mruck, Advent’s Co-head of Central and Eastern Europe.

"Although other acquirers were interested in the business, our proposal to bring in an experienced operating partner to help the business grow proved a powerful influencer. Six weeks after the start of the formal sales process, we acquired a majority stake in CCS."

Operational improvements

Advent’s plan was for CCS to offer new and better services to existing clients and then use its strong position as a platform to extend its offering to other countries in the region.

“Our original vision was to make the company more efficient and customer-oriented,” explains Chris Mruck. “Although CCS occupied a  solid market position, there was plenty of room for operational improvements." Yet in the time it took Advent to complete stage one of the development plan, CCS had already attracted the attention of another buyer, the highly entrepreneurial US business FleetCor.

Established in 2000, FleetCor had become the fastest-growing fuel card issuer and processor in the US and was looking for other European targets, having just acquired a UK company.

“We found we were speaking the same language and had similar plans for the business, only as part of a bigger group. FleetCor was offering us a more diversified offering in a sector that we were so positive on”, says Chris Mruck.

“Although CCS occupied a solid market position, there was still plenty of room to make efficiency savings and increase earnings through more customer focus. We also wanted to introduce some new thinking into an industry in which inflexibility prevailed.”

- Chris Mruck, Advent Managing Partner

Merger benefits

A sale to FleetCor offered CCS a fantastic opportunity to be part of a group with ambitions to become the leading global player in this market. It was a hugely complementary strategic fit. “We hadn’t planned on selling so soon, but we took the pragmatic view that this was the best option for CCS and its development. We felt that FleetCor’s entrepreneurial spirit and management capability would be of great benefit to CCS,” says Chris Mruck. 

Following the merger, Advent gained a small stake in FleetCor. Having been invited onto the company’s board, we worked alongside FleetCor to expand its footprint internationally through organic growth and acquisition. CCS has since acquired Tracker, a leading business fleet GPS monitoring business in the Czech Republic and in addition, the remaining 50% of stock in the global business. The FleetCor Group also acquired three businesses in the UK, Ireland and the US and continues to look at attractive opportunities in the CEE region. In 2010 FleetCor completed an IPO on the New York Stock Exchange (NYSE: FLT), in early 2012, Advent completed its final exit from the business.

 

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Chris Mruck

Managing Partner, Advent International S.R.O, Prague
T: +420 234 749 750