Comdata Holdings Corp. has signed a letter of intent to acquire Fleetman Inc., a leading provider of fuel management and information services to vehicle fleets.
Based in Brentwood, Tenn., Comdata has long been the top player in fleet management services for long-haul trucking customers. The company is a leading provider of transaction processing and cash advance services for the trucking and gaming industries.
With the Fleetman purchase, Comdata aims to consolidate its position in the fleet management market by better serving the local fueling needs of its long-haul client base.
"As distribution patterns change, our truck load carriers are demanding both local fueling services and optimized routes to support their short- haul and pickup and delivery operations," said George L. McTavish, Comdata's chairman and chief executive officer.
Comdata estimates that more than two billion commercial fleet and maintenance transactions occur annually in local and regional fleet segments. It believes the latest acquisition will establish a "national presence" in marketing fuel and maintenance services.
"Comdata is expert in providing management information and reporting systems," said David Robertson, president of The Nilson Report, an Oxnard, Calif.-based card industry newsletter. "They're leveraging off their existing strengths to move into local markets, which have strong potential."
Mr. Robertson said the move is not likely to force Comdata into direct competition with Wright Express, because they appeal to different market segments. Wright Express of Portland, Maine, has raised its profile in the banking and payments industries since its acquisition last year by SafeCard Services Inc., a provider of credit card protection and other marketing services through banks.
"If you're driving an 18-wheeler across the country, you're going to go with Comdata," Mr. Robertson said, adding that smaller vehicles working locally are more likely to pick Wright Express.
In March, Fleetman acquired GasCard Inc., a licenser and transaction processor for a nationwide, card-activated fuel management system. Together, the fleet management companies serve 8,000 outlets in 46 states.
Fleetman, based in New Orleans, offers the Fuelman system, including management controls and processing services for commercial, government, and utility fleets.