GTCR has agreed to acquire Reston, Virginia-based Sage Payment Solutions Inc, a provider of payment processing and merchant acquiring solutions in North America. Also, GTCR has teamed up with SPS management to pursue growth initiatives and fund future acquisitions in the payment processing sector. In connection with this, GTCR has committed up to $350 million in equity funding to support this effort. The deal is expected to close in the third quarter of this year. Jefferies served as financial adviser on the transaction.
CHICAGO, June 2, 2017 /PRNewswire/ — GTCR, a leading private equity firm, announced today that it has entered into a definitive agreement to acquire Sage Payment Solutions, Inc. (“SPS” or the “Company”) for $260 million. SPS, headquartered in Reston, Virginia, is a leading provider of payment processing and merchant acquiring solutions in North America. GTCR is acquiring SPS from The Sage Group plc (LSE: SGE) (“Sage”), a global provider of integrated accounting, payroll and payment solutions headquartered in the UK. GTCR is partnering with SPS management to pursue organic growth initiatives and fund future acquisitions in the payment processing industry. To support this strategy, GTCR has committed up to $350 million of equity capital to the platform. The transaction is expected to close in the third quarter following receipt of regulatory approvals and other consents.
SPS provides credit card, ACH, check, gift and loyalty card processing services to small and medium-sized businesses (“SMBs”) in the United States and Canada. SPS’s payment solutions integrate with merchants’ business management software solutions and enable them to securely accept electronic payments through multiple channels, including card-present, e-Commerce and mobile. Through the Company’s Sage Payment Solutions EFT subsidiary, SPS offers specialized ACH processing services to merchants, processors and other businesses. SPS serves a diversified client base of approximately 100,000 SMBs including healthcare providers, non-profit and faith-based organizations, and accounting software companies.
In conjunction with the transaction, SPS and Sage entered into a strategic alliance to facilitate ongoing cooperation serving merchants and partners. Under the terms of this alliance, SPS will be the preferred provider of merchant processing services to Sage clients in the United States. SPS and Sage will work to provide a superior payments experience to mutual customers through seamless technology integration and exceptional service. SPS and Sage have pledged to work together to maintain the integration of technology and systems. Sage will retain a financial interest in SPS in addition to the strategic alliance and other commercial agreements between the parties.
“We are delighted to partner with the SPS management team at this exciting time in the Company’s evolution,” said Collin Roche, Managing Director at GTCR. “SPS has a leading platform with robust software integrations in attractive end markets. We intend to invest further in the technology and offer additional innovative solutions to SPS customers and partners. GTCR’s long history of investing in payments and extensive experience in corporate carve-outs provides us with a differentiated perspective on the Company, and we are excited to bring significant resources and expertise to help fuel the next phase of SPS’s growth.”
Aaron Cohen, Managing Director at GTCR, continued: “We are excited to acquire SPS and work as partners with Sage on a go-forward basis. We believe the Company is well positioned to continue its growth and success within the rapidly evolving area of integrated payments, and we look forward to supporting greater organic growth and expansion through acquisition.”
Fully committed financing for the transaction has been arranged by GTCR and funded by Antares, Ares, Jefferies, Barclays and NXT. Jefferies served as financial advisor. Latham & Watkins and Paul Hastings served as legal counsel.
Founded in 1980, GTCR is a leading private equity firm focused on investing in growth companies in the Financial Services & Technology, Healthcare, Technology, Media & Telecommunications and Growth Business Services industries. The Chicago-based firm pioneered The Leaders Strategy™ – finding and partnering with management leaders in core domains to identify, acquire and build market-leading companies through transformational acquisitions and organic growth. Since its inception, GTCR has invested more than $12 billion in over 200 companies. For more information, please visit www.gtcr.com.
Sage Payment Solutions (“SPS”) provides business technology solutions to global small and medium sized companies, in every industry, that enables businesses to get paid, make payments and manage their money—simply and securely. SPS’ comprehensive suite of products and services deliver easy to use technology for every stage of a client’s lifecycle. For more than 20 years, SPS has been dedicated to the success of its clients, providing a seamless connection with, and between, business applications; offering valuable business insights that enable clients to run their businesses smarter, so they can run their businesses better. For more information, please visit us at www.sage.com/us/payment-processing.
Sage is the market and technology leader for integrated accounting, payroll and payment systems, supporting the ambition of entrepreneurs and business builders. Today, business builders measure success in strong relationships, partnerships, and communities. It’s why Sage helps drive today’s business builders with the most intelligent and flexible cloud-enabled software, support and advice to manage everything from money to people. Daily, more than 13,000 Sage colleagues in 23 countries work with a thriving global community of over 3 million entrepreneurs, business owners, tradespeople, accountants, partners and developers to champion the success of business builders everywhere. And as a FTSE 100 business, we are passionate about doing business the right way, supporting our local communities through the Sage Foundation. Sage – the market and technology leader for integrated accounting, payroll and payment systems, powered by the cloud and supporting the ambition of the world’s entrepreneurs and business builders. Because when business builders do well, we all do. For more information, visit www.sage.com.