Ex-Endeavor Capital CEO buys Repay for ~15x Ebitda

In the end, it wasn’t a strategic or a PE firm that ended up buying Realtime Electronics Payments, or Repay, from Corsair Capital.

Thunder Bridge, a blank-check company led by the former CEO of Endeavor Capital Management, said Jan. 22 it was merging with Repay.

The deal valued the Atlanta payments provider at $653 million. The transaction includes $170 million of debt, according to Tim Murphy, Repay’s CFO, on a conference call.

Repay is selling for about 14.8x 2019 adjusted EBITDA of $44 million, Murphy said.

Buyouts reported in September that private equity was shut out of the Repay auction. Steve McLaughlin of Financial Technology Partners advised on the Repay process, which focused more on strategics and SPACs, the story said.

Established in 2006, Repay processed about $7 billion of payment volume in 2018 for more than 3,000 clients. It operates in three verticals: personal loans, auto loans and receivables management.

Corsair, the New York financial services investor, acquired Repay in 2016. That year, Repay acquired Sigma to expand into auto loans. It then bought PayMaxx in 2017 to cement its position in auto loans, while also adding PaidSuite that same year to gain entry into receivables management, Murphy said.

Repay’s revenue in 2018 was $130.5 million, up 59 percent from $82.3 million in 2016, an investor presentation said.

The deal is the latest for Gary Simanson, president and CEO of Thunder Bridge. The special purpose acquisition vehicle went public in June 2018, raising $225 million.

Pete Kight, Thunder Bridge’s executive chairman, is former chairman and CEO of CheckFree, which was sold to Fiserv for $4.4 billion in 2007. Kight also is former chairman and managing partner of Comvest Partners.

With the sale, Thunder Bridge is changing its name to Repay. The merged company will remain public, trading on Nasdaq. Repay shareholders, including Corsair, will own 44 percent of the company, Thunder Bridge will have 52 percent while SPAC sponsors will own 4 percent.

“Corsair is not exiting,” Simanson told Buyouts. “Corsair will continue to be a significant shareholder of the company going forward.”

Thunder Bridge isn’t Simanson’s first SPAC. He also was CEO of Community Bankers Acquisition Corp, a blank-check company that raised $60 million in 2006. CBAC bought BOE Financial Services of Virginia and TransCommunity Financial.

More recently, Simanson was president and CEO of First Avenue National Bank from 2013 to 2015, according to SEC regulatory filings. Simanson was also president and CEO of Endeavor Capital Management from 2015 to 2017, his LinkedIn profile said. Endeavor, of Reston, Virginia, was an investment firm that made both debt and equity investments.

Simanson also is a managing director of First Capital Group, an investment bank, his LinkedIn said.

“It’s a very compelling space,” Simanson said, when asked why Thunder Bridge wanted to buy a fintech company. “I’ve had a career in banking [and] in fintech.”

He declined further comment. Corsair could not be reached for comment.

Action Item: For more information call Gary Simanson at +1 202-431-0507

Correction: A prior version of this story said that Simanson was CEO of Endeavour Capital, an Oregon-based firm. He was not. Simanson was CEO of Endeavor Capital, a Reston, Virginia investment firm. The story has been changed