H.I.G. Capital received more than a dozen proposals for its sale of Onyx Payments, a source familiar with the situation said. H.I.G. has whittled the group to “over a handful” of bidders that made it past the first round, the source said.
The group includes both strategics and financial buyers, the person said. “Parties are actively in the data room doing diligence,” the source said.
Dallas-based Onyx Payments processes commissions that hotels pay to travel agencies. H.I.G. put the company up for sale in February. The Miami private equity firm is seeking bids “deep in the threes” — the high $300 million region, Buyouts reported in March. Robert W Baird & Co is advising on the process, Buyouts said.
First-round bids for Onyx Payments were due last month, Buyouts reported. Strategics including Sabre, Wex Inc and Fleetcor, as well as private equity, were in the running, Buyouts said.
The Onyx Payment auction has been rife with talk of low offers. Potential buyers bid 8x to 9x Ebitda while the seller, H.I.G., was seeking 11x to 12x for Onyx, a second source familiar with the situation said. “Value expectations were higher than where the market is,” the second source said.
H.I.G. is “happy where first-round bids” came out, the first source said.
Several sources wondered if the auction had stalled. Due to management travel and customer obligations, H.I.G. did not conclude management presentations with bidders until last week, the source said. H.I.G. may still do a second round for Onyx, or a “check round,” or it may go to a final bid, the source said.
A check round is typically done after potential buyers have done work on a deal to narrow the field. An investment bank will ask buyers if they are moving off their indications-of-interest bids.
Executives for H.I.G. declined comment. Baird and Onyx Payments could not immediately be reached for comment.
Action Item: To contact Onyx call 214.396.3280.