Insight Partners is exploring a sale of Ministry Brands, a provider of cloud-based technology for faith-based organizations, sources familiar with the matter told PE Hub.
The firm has hired William Blair to advise the company on its sale, which is expected to launch within the next month or two, some of the sources said.
FT Partners, which was hired to provide financial advice on a 2019 sale process for Ministry Brands, remains engaged by the company and continues to provide advice for this and all matters, the sources added.
Ministry Brands, based in Lenoir City, Tennessee, provides technology for church administration, worship planning, accounting and financials. Its offerings include online giving, payment solutions, background screening, websites, live streaming and communications. It encompasses 31 brands, including FellowshipOne, Clover Sites and MinistryLINQ.
“To date the company has been best served with all brands under one management team,” one of the sources said. “[But] in light of accelerating growth, executives are considering a sale to allow for more tailored management and investment.”
Ministry Brands is the “de-facto standard software and payments provider to faith-based organizations,” one of the sources explained. Since July 2020, the company has been run by CEO Pat O’Donnell, whose title is listed as “managing director” on both LinkedIn and the company’s website.
Ministry Brands has close to $100 million in run-rate EBITDA, which translates into a 35 percent profit margin, the people familiar with the company said.
In 2019, PE Hub reported that Insight had hired FT Partners to advise the company on a potential sale. At the time, sources told PE Hub that a deal could value the software provider at as much as $4 billion. It is unclear why that process did not result in a transaction.
Ministry Brands has experienced exceptional tailwinds through the pandemic as faith-based organizations have accelerated their digital transformation and rapidly moved to online giving and online payments.
Eric Crowley, executive director at GP Bullhound, told PE Hub that one of the main in-person activities – religious gatherings – were forced to completely transition to digital overnight.
“Faith-based organizations historically gathered in person, where tithing, or giving, happened through cash or checks,” the banker said. “Ministry Brands was perfectly positioned to help those religious organizations transition to 100 percent digital with a one-stop offering of tithing, live streaming and many other services.”
Another source noted that the payment opportunity is massive for the company, which serves more than 90,000 faith-based organizations throughout North America and continues to grow its customer base.
In a press release, Ministry Brands said that, as of mid-March, it had recorded a 189 percent increase in individuals contributing gifts online. Two of Ministry Brands’ companies, ChurchStreaming.tv and easyTithe, reported “unprecedented” growth, the release said. EasyTithe saw a 99 percent increase in online giving and ChurchStreaming.tv saw a quadrupling of its streaming usage over the same period in 2019.
Insight Partners, which acquired the company in 2016 from Providence Equity Partners, is expected to fetch a significant return on its investment.
In 2016, Insight paid $1.4 billion to acquire Ministry Brands, one of the sources said. Preserving its independent structure, the company later became part of Community Brands, which also encompasses Education Brands. Ministry Brands produced $80 million in EBITDA at that time, according to a person familiar with the matter.
Ministry Brands’ founder Ross Croley ran the company from 1997 to 2017. He also held the CEO and executive chairman positions with Community Brands, Therapy Brands, Property Brands and PSG-backed Government Brands, all of which he founded.
Government Brands is also approaching a sale process via William Blair, PE Hub reported this month.
LightYear Capital sold Therapy Brands to KKR at a $1.25 billion value in April, sources familiar with the deal terms told PE Hub.
Insight Partners and William Blair declined to comment. Ministry Brands did not return PE Hub’s request for comment.