Francisco sells PayLease to Vista Equity

Vista Equity Partners has become the third private equity firm to own PayLease, the property-management-payment-tool provider put up for sale earlier this year.

The buyout shop co-founded by Robert Smith said June 28 that it acquired a majority of PayLease. Terms weren’t disclosed. Francisco Partners, the seller, and company management will retain significant ownership stakes, a statement said.

Buyouts reported in June that Francisco was seeking a buyer for PayLease. Raymond James advised on the auction. PayLease was expected to fetch $300 million to $400 million, Buyouts said.

The PayLease auction attracted other PE firms including TPG, GTCR and Warburg Pincus, sources said. Vista Equity went exclusive with PayLease about two weeks ago, one of the sources said. Vista paid $300 million to $350 million, two sources said.

Vista’s investment is coming from its Foundation Fund series, which invests in small and lower-middle-market enterprise-software companies. Vista Foundation III closed earlier this year on $2.5 billion.

PayLease, San Diego, provides online-payment, resident-billing and utility-expense-management tools to property managers. Ty Kalklosch and Yann Phung co-founded the company in 2003 over a round of beers as they were discussing more convenient ways to pay the rent, the website says. PayLease employs 222 people.

Jennifer Stahlman, a PayLease spokeswoman, said via email that “everyone here is very pleased with Vista’s investment.” The deal will help PayLease expand its product offerings and refine existing ones, she said.

Francisco, a San Francisco PE firm, acquired PayLease in 2014 from Mainsail Partners, which retained a stake at the time. Francisco invests in technology and technology-enabled businesses.

The PayLease sale comes just months after Francisco exited another fintech company, Paymetric. Vantiv Inc agreed to buy Paymetric in May for $525 million, Buyouts reported.

Mainsail’s investment in PayLease dates to 2010. The San Francisco growth equity firm targets “bootstrapped” companies in software, technology-enabled services and healthcare. Mainsail typically invests from $5 million to $50 million per deal. The firm in 2016 raised $384 million with its fourth fund, Mainsail Partners IV LP.

Vista and Francisco Partners could not immediately be reached for comment.

Action Item: Contact PayLease CEO Dave Dutch at +1 866-729-5327

Photo courtesy AndreyPopov/iStock/Getty Images