PE Deals

FTV Capital’s VPay, healthcare e-payments firm, heads to auction block

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FTV Capital, VPay, payment technology, fintech, private equity, merger, M&A
SARINYAPINNGAM/iStock/Getty Images
  • FTV investment dates to February 2016
  • VPay: payments for health and dental plans, TPAs, workers comp and auto insurers
  • FTV Fund V collected $850 mln in September 2016

By Sarah Pringle and Luisa Beltran

FTV Capital is preparing to launch a sales process for VPay, whose e-payment services focus on medical providers and auto-repair shops, five sources said.

The San Francisco and New York growth firm hired Raymond James for financial advice on a process, three of the sources said.

FTV hopes to command north of $700 million for the B2B payments company, two of the people said. One of these people placed the Richardson, Texas, company’s Ebitda at about $25 million to $30 million.

From a strategic-buyer perspective, several large financial firms are said to be looking at the company, one of the people added. Whether financial sponsors will be in the mix is unclear.

FTV’s investment in VPay dates to February 2016. The firm led a $76 million investment in the company, a statement at the time said.

Andy Roberts at the time joined VPay as CEO, while Bobby Allen, founder and former CEO, became chairman. Roberts was former CEO of Fleet One, which was acquired by WEX in 2012. In connection with the transaction, FTV’s Chris Winship, Richard Garman and Robert Anderson joined the company’s board.

VPay makes billions in payments on behalf of health plans, dental plans, third-party administrators and workers’ compensation and auto insurers. The company serves more than 900,000 medical providers, auto-repair shops, policyholders, claimants and members.

The company’s virtual card technology helps eliminate paper-based checks and postage, simplify payment reconciliation and improve efficiency, curb fraud, and limit delays in funding and settlement, among other things.

FTV focuses on high-growth markets in the enterprise technology and services, financial services and payments and transaction processing sectors. The firm typically invests $10 million to $85 million in its companies. FTV closed its fifth fund at $850 million in September 2016.

The VPay auction is the latest in the highly coveted payments sector. Instamed, a VC-backed healthcare company, is up for sale and could fetch $500 million to $600 million, Buyouts reported in February.

In March, Reverence Capital Partners agreed to buy Cashnet from Blackboard Inc, a portfolio company of Providence Equity Partners. Providence was seeking $800 million for the company, Buyouts said. Insight Venture Partners that month provided more than $100 million to PayIt.

Two huge strategic payment deals occurred earlier this year. Fidelity National Information Services in March agreed to buy WorldPay for about $35 billion. Two months earlier, in January, Fiserv acquired First Data for $22 billion.

Representatives of FTV, VPay and Raymond James didn’t immediately return requests for comment.

Action Item: Check out FTV’s latest Form ADV: https://bit.ly/2V1vIBu