What happened

Shares of WEX (WEX 0.82%) popped as much as 10% today after the company completed its acquisition of eNett and Optal. The deal was first announced in January and has been mired in controversy throughout the year. The stock was up 8% as of 12:45 p.m. EST.

So what

WEX, a fintech company that specializes in corporate payment cards and maintaining vehicle fleets, had tried to back out of the acquisition in May, citing the "material adverse effect" that the pandemic was having on eNett and Optal. The transaction was originally designed to expand WEX's position in the corporate travel market, which was decimated by the COVID-19 pandemic.

Illustration of a gavel made out of 1s and 0s

Image source: Getty Images.

eNett and Optal, both based in the U.K., sued WEX in an effort to force it to honor the original terms at the urging of activist investor Elliott Management. The High Court of Justice of England and Wales issued a preliminary ruling in October siding with WEX. All parties have decided to settle the litigation pending in the English courts and agreed to a reduced purchase price.

Now what

WEX will only pay approximately $577.5 million in cash for the deal, considerably lower than the original price tag of $1.7 billion. The purchase will be funded with cash on hand; the original transaction structure would have included $1.275 billion in cash and 2 million shares of stock.

The company says that the acquisition will have an immaterial impact on adjusted net income through 2021, although there are lingering uncertainties related to the pandemic.