Corpay Inc to Acquire Alpha Group International PLC Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Ramsey El-Assal - Barclays Services Corp - Analyst : Thank you so much for taking my questions this morning. Ron, you mentioned a couple of new products that the deal is giving you alternative bank accounts, I think, and bank account consolidation software. Can you just give us a little more color in terms of what those are? Mark Frey - Corpay Inc - Group President - Cross-Border Solutions Yeah. Thanks, Ramsey. It's Mark here. So the two really interesting capabilities that come with Alpha are, one, their ability to provide a virtual account product ultimately and a multicurrency account product to both corporate and institutional customers. So it becomes effectively a transactional bank account. The second key thing that they have is basically a TMS platform with multiple capabilities. But what we're really excited about is the ability to track in real-time account balances and transaction activity across all financial institutions or all bank accounts ultimately for an entity, whether it be a corporate or an institutional client that has customers or bank relationships at multiple different entities. So it's really a way to get a single view into the cash position of an entire financial organization.

Question: Ramsey El-Assal - Barclays Services Corp - Analyst : I see. A quick follow-up on the divestitures that is one of the potential funding levers for the deal. Any additional color about what those are or the likelihood that you'll be able to find a strategic buyer perhaps?

Question: Ramsey El-Assal - Barclays Services Corp - Analyst : Got it. Thank you very much.

Question: David Koning - Robert W. Baird & Co Inc - Analyst : Yeah. Hey, guys, thank you. Congrats. And I guess, first of all, the revenue growth, very good from the last few years and the margin is very high. Are those sustainable type numbers, meaning like maybe how is 2025 revenue growth trending? And is 60% margins sustainable?

Question: David Koning - Robert W. Baird & Co Inc - Analyst : Got you. And maybe just a quick follow-up. The price seems incredibly attractive to you. Is there something about them operating it that was becoming more difficult, meaning that they kind of felt like they had to sell at this price? And in your case, do you do something that makes it dramatically better just given the consolidation into the Corpay platform?

Question: David Koning - Robert W. Baird & Co Inc - Analyst : Great. Thank you.

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : Good call. I did check it and I muted it. Hope you can hear me. Just trying to think this through a little bit. And tell me if I'm wrong, I always trying to think about parallels or analogies to understand complex stuff. So is this similar to a virtual card situation where you're spinning out a virtual bank account to facilitate, I don't know, more trust or going beyond just a transaction relationship with some of your corporates and your partners to spin out more of these cross-border transactions. I'm just trying to think about the best analogy on why you're extending here. And ultimately, what new fee pools you're generating or who you're taking away from to do it? Do you follow my question?

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : No, you explained it well, and you'll own more of the cross-border, I suppose, ecosystem. One quick follow-up, if you don't mind. Just so with Mastercard, how important is Mastercard in helping make this as strong as you think it could be run?

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : That's great. Really interesting. Thank you for the update. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2025 / 1:00PM, CPAY.N - Corpay Inc to Acquire Alpha Group International PLC

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Thank you. Good morning. Just to the line of questioning earlier on some of the synergies and such. Ron, could you just talk about sort of what's factored into the $0.50 you mentioned for next year? It seems like there's a lot of complementary and supplemental type products that could be driven off of this. Does it accelerate the growth rate of corporate payments revenues? Thanks. Mark Frey - Corpay Inc - Group President - Cross-Border Solutions Yeah, great question. We do think that we can continue to accelerate the growth of Alpha. They have been very successful at selling their product in the European geography, in particular, UK and across Europe. What we're really excited about is to take that product and those relationships that have global needs and to be able to sell them into North America and APAC, given our licensing footprint and our sales resources that we have. So that's one of the primary drivers, but we really think that we can accelerate what has already been a high-growth segment.

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : And like how much of that is in the $0.50?

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Appreciate it. Just one question for Mark. Just obviously, like stablecoins are being discussed as a major disruptive threat, right, for incumbent payment companies. You guys are obviously getting involved in it. I'm just curious sort of what your view is. I mean, Mark, you talked about on-ramp, off-ramp for partners. Like are those partners that are competing with you? Like how do you view that whole landscape and how you guys fit in and what your difference is? Mark Frey - Corpay Inc - Group President - Cross-Border Solutions Well, I think the first thing is this is already a high-growth segment for us where we can onboard customers. We can provide on-ramp, off-ramp solutions where we can move money for them in fiat form, but also in digital form as well. So we've already been leveraging blockchain networks to move money to the emerging market world and make payments in a number of geographies around the world. We're going to continue to lean into that. We will also expand our ability to send and receive and allow our customers to store value in stablecoin as well. And we see that as complementary to the existing service, not just for our customers that are native in that digital space, but for our corporate customers as well. So as the world begins to transition to stablecoin, we think that we will stand in a position where we will be the natural fit for these corporate customers to begin to leverage these products and capabilities. We're already standing up that technology. We've already built the partnerships. We're expanding our rails and connectivity all the time, and this is something that we're leaning into significantly.

Question: Trevor Williams - Jefferies LLC - Analyst : Great. Thanks very much. And I'll just follow up on stablecoins. Mark, maybe if you could just give us a sense for what your conversations have been like to date with the existing corporate customers, the level of inbound demand, if any, that you're seeing from them for stablecoins. And then with some of the infrastructure providers you're working with, like BB&K was one you had in the deck. Just what specifically you're working with them on? And if you've got a pipeline for more partnerships like that, if we should expect to see that kind of trickle out over the rest of the year as well? Thanks. Mark Frey - Corpay Inc - Group President - Cross-Border Solutions Yeah. Thanks. So I'd say for corporate customers, they're not necessarily looking for stablecoins. What they're looking to do is move money as cost effectively, as efficiently as possible. And they view us as the trusted partner that's always helped them do that. We're leveraging stablecoin and digital payments is just another means by which to deliver that same value proposition to improve the access to 24/7 payments to be able to process around the clock effectively and to drive unit cost of processing significantly lower, which is beneficial in terms of our bottom line. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2025 / 1:00PM, CPAY.N - Corpay Inc to Acquire Alpha Group International PLC In terms of the conversations with partners, I'd say every door that we've opened has been a very willing partner, very excited to have a conversation with us and/or expand existing relationships materially. So we're continuing to lean into our existing strategy, which has been to leverage blockchain to make payments to the emerging market world to move our own liquidity from a treasury perspective to try and find efficiencies there and continue to build customer solutions, both leveraging stablecoin, but blockchain networks more generally to move money for our customers and third-party payments. And I think the reaction that we've had from our partners has been very positive. We continue to, I'd say, move very, very quickly in terms of progressing some of these relationships and standing up new technologies and services for our customers. We did say at the top that we are planning to roll out a number of services still this year. And so we see this as being a driver of growth for us in the near term as well.

Question: Trevor Williams - Jefferies LLC - Analyst : Okay, no, I appreciate all that. Thank you, guys.

Question: Nate Svensson - Deutsche Bank AG - Analyst : Hi, guys. Congrats on the acquisition. I'll ask kind of both of mine upfront. So beyond the new product capabilities that this brings, I think the entry into new verticals and the help with the international expansion efforts are both pretty attractive about this. So I wanted to ask about those. So with regards to the private markets and institutional fund clients, I think you mentioned TAM, above-average growth rates, and an attractive credit profile. But maybe hoping for a little more color on the opportunity you see in these new verticals and kind of what it opens up for the existing Corporate Payments business. And then on the international expansion, I think you answered in Sanjay's question some of the efforts to take Alpha's business into new geographies, but maybe the flip or reverse of that question is they have a strong presence in the UK, Europe, et cetera. What's going to be the strategy once Alpha is in the fold to drive cross-sell and new client wins again within that existing Corporate Payments business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2025 / 1:00PM, CPAY.N - Corpay Inc to Acquire Alpha Group International PLC Mark Frey - Corpay Inc - Group President - Cross-Border Solutions So great question, Nate. I'll try to address all of them at once. So I think the real idea here, and I think the benefit that we bring to this conversation is with some of these existing conversations that Alpha has been having with institutional customers, the balance sheet strength that Corpay brings to the equation of the Fortune 1000, S&P 500 companies certainly helps an awful lot in terms of managing their counterparty relationships and the way they think of Alpha traditionally as a correspondent banking services provider, let's say. And so I think that the feedback that we've heard from the market has been very positive about Corpay stepping into that space with its existing customers. And this is a space that we know. We're already in this space, and we've had a good amount of success over the last 18 months of selling into this institutional vertical. This just allows us to go a whole lot faster. I think in terms of what we're really excited about, and we touched on it is these existing relationships that Alpha has in the UK, in Europe, in the Channel Islands in Luxembourg in many specific geographic markets, those funds, those institutional customers and those fund admins have global needs. And so to be able to take that same service offering and now extend it to not just the US and Singapore, but throughout our APAC region where we have licenses to Canada as well, we see as being a real significant driver for the institutional vertical. And then I think the other thing that we really like is this is capability that we can then cross-sell into our corporate customers everywhere. The beauty of our platform is that we have one technology stack, one set of operational processes. And with each acquisition that we've done, we've consolidated the capabilities and embed them all within that same platform. The strategy here in the end will be the same. What that allows us to do then is by the time we get that done, that -- that integration work that we go super fast on, we have one product that we can sell to all of our customers everywhere in the world allows us to go super fast. It allows us to drive down unit cost to serve, allows us to improve operational processes and really have a high-performing mature business in that regard.

Question: Mihir Bhatia - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hi, good morning. Thank you for taking my questions and congratulations on getting the deal announced. I wanted to just go back to the discussion about alternative bank accounts for a second. Just trying to understand a couple of things about these accounts. A is like how are these different than the multicurrency accounts you offer? And then maybe just talk about why they are particularly -- why Alpha was particularly well penetrated with investment funds. Is there something about these accounts and the use case that leads to them being more attractive for investment funds? Or like is there an opportunity to sell these accounts to your corporate customers, too? Was that -- I guess what I'm trying to understand is, was that Alpha, just that was their sales strategy and where they were gaining momentum? Or was it more -- that's just where these accounts will be used? Thank you. Mark Frey - Corpay Inc - Group President - Cross-Border Solutions Yeah, Mihir, great question. It's Mark here. So I'd say it is the same core technology ultimately that sits on our platform today in terms of the underlying capability. But what Alpha has done, which has been particularly attractive, has married both a specialized selling force to go after this institutional vertical, but they've also built some purpose-built front end in terms of the user interface that works really well in this sector and provides specific features and benefits that these customers don't typically have access to in terms of a traditional banking platform. So it's really purpose-built and custom fit for those market needs. And we believe it's very portable to the other geographies so that we can take this exact same platform and go sell it in other markets and provide that same differentiated user experience.

Question: Mihir Bhatia - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Okay. Understood. Thank you. Thanks for taking my question.

Question: Ken Suchoski - Autonomous Research - Analyst : Hey, good morning, Ron and Mark. Thanks for taking the question. I wanted to ask one on stablecoins. So when you guys look across the space, can you talk about where you are seeing stablecoins being adopted in cross-border B2B payments? I think I heard some adoption in EM countries -- paths to EM countries. Is it really for lower cost? Or is it sort of 24/7 settlement? I mean, what's driving the adoption today? And where are you seeing that? Mark Frey - Corpay Inc - Group President - Cross-Border Solutions So I think the primary use cases, Ken -- and thanks for the question that we're seeing adopted is access to emerging markets. So getting access to dollars, in particular, in the Southern Hemisphere in markets where there isn't as much liquidity. I think we also see it in terms of some higher-risk segments that don't necessarily have great access to transactional banking services and correspondent banking. So these are fintechs and other firms that are looking to move money and move money efficiently. I think the other thing that we see is corporate treasurers beginning to look at how they can move money outside of traditional banking. So the ability to move dollars ubiquitously 24/7 on the weekends and outside of the Fed-clearing cycle. And the same thing for other currencies as well. So we're beginning to see some corporate adoption. I would say it's probably pretty limited to be perfectly frank. Where we're starting to see it a little bit more is in the native crypto space and digital space as well as fintechs.

Question: Ken Suchoski - Autonomous Research - Analyst : That makes a lot of sense, Ron. And I guess maybe -- I guess to -- yeah, I was trying to think about that. I mean, is it one of these things -- and maybe you could go into that, I guess, as you think about parts of the cross-border business, I mean, is it -- are there parts that are just less sensitive to cost? I mean I think about that hedging business that you have, I mean, it sounds like more of a service sort of a touch point business where you're actually advising and helping clients make decisions on these things. I mean it sounds like that's going to be very insulated --

Question: Ken Suchoski - Autonomous Research - Analyst : Yeah, totally. Okay. Great. And then just, I guess, my follow-up just on the -- I mean, a lot of discussion on the cross-sell and the efficiencies you can get. Just in terms of like thinking through the synergy numbers on the revenue and cost side, I mean, any way to think about those as it relates to this deal?

Question: Ken Suchoski - Autonomous Research - Analyst : Okay, great. All right. Thanks so much.