Clairvest makes 13.5x its money on Kubra sale

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Clairvest Partners, which recently closed its fifth fund, has exited payment processor Kubra Data Transfer after eight years.

Hearst Corp, a media and information company that owns newspapers including the Houston Chronicle and the San Francisco Chronicle, said Wednesday that it has acquired 80 percent of Kubra. Financial terms weren’t announced, though one source told peHUB the company sold for $350 million.

Clairvest, which owned 58 percent of Kubra, said it realized $143.4 million in proceeds from the sale. The Toronto PE firm said total proceeds over the investment’s life was $155.7 million. This equals to 13.5x invested capital from the sale, according to a separate statement. The Kubra deal also produced a more than 40 percent IRR, Clairvest said. It was not clear who else exited.

Kubra, of Mississauga, Ontario, is a payment processor for utilities and companies in the insurance, financial services and healthcare sectors. Nearly all, or 98 percent of its business, is in the United States. Kubra was Clairvest’s first investment from its third fund, which closed at C$300 million (US$275.86 million) in 2006. The PE firm closed its fifth fund in July at C$600 million, while its fourth pool collected C$467 million in 2011.

Clairvest originally put C$13 million into the company. Kubra completed two tuck-in acquisitions and Clairvest reinvested, the first source said. In 2012, Clairvest took some of its money back when Kubra paid out a $20 million dividend to its shareholders.

The payment processor went up for sale in May, peHUB reported. Kubra generates roughly $22 million EBITDA, the first source said.

The sale to Hearst, which is not known for being acquisitive, is surprising. With the decline of traditional publishing, Hearst has been using cashflow from its publishing business to diversify into data assets, a second source said. Hearst owns CDS Global, of Des Moines, Iowa, which provides business processing outsourcing for more than 1,100 brands in the media, nonprofit and consumer products sector. Kubra will operate as an independent unit of Hearst Magazines but will work closely with CDS, Hearst said in the statement.

Steve McLaughlin of FT Partners provided financial advice to Kubra while Wells Fargo Securities advised Hearst.

Executives at Clairvest and Kubra could not be reached for comment.

Photo courtesy of Shutterstock

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