Lindsay Goldberg again fails to sell First American Payment

failure

First American Payment Systems, which is backed by Lindsay Goldberg, has pulled its auction yet again, three sources told peHUB.

Earlier this year, First American tapped Goldman Sachs to find a buyer. The Fort Worth, Texas-based payment processor produces roughly $90 million EBITDA and was looking for a “strategic, double digit multiple,” one banking source said. First American is also heavily leveraged with debt of 7x EBITDA, peHUB has reported.

The auction did not produce much interest, sources said. First American is now looking to do a dividend recap, persons said.

This would be the fourth distribution since 2006—that we know of—that First American has paid out to its owners, which include Lindsay Goldberg. It also appears to be the third dividend since 2010.

Lindsay Goldberg, a New York PE firm, originally invested in First American in 2003. In 2006, the company paid out an $80 million dividend, according to Thomson Reuters Loan Pricing Corp.

In 2010, Lindsay Goldberg hired Citadel to run a process for First American. The company had about $50 million of EBITDA at the time and was seeking bids of 12x that amount, peHUB has reported. Lindsay Goldberg ended up pulling the sale, and First American distributed another dividend totaling $135 million to shareholders, including Lindsay Goldberg.

In 2012, Lindsay Goldberg hired Goldman to run another auction. First American had about $80 million EBITDA and was seeking bids of 9x, Reuters reported. That sale was apparently also pulled. First American then paid out a $115 million dividend to Lindsay Goldberg, Moody’s Investors Service said.

News of the third failed auction comes as Lindsay Goldberg is out fundraising for its latest pool. The PE firm is seeking $4 billion, peHUB has reported. Lindsay Goldberg expects to hold a “substantial first close” for Fund IV by midyear, Dow Jones LBO Wire has reported.

Goldman declined comment. Executives at Lindsay Goldberg and First American did not reply to calls or messages requesting comment.

Photo courtesy of Shutterstock

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