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Is GTCR seeking a buyer for Paya?

Paya, the company formerly known as Sage Payment Solutions, is shaping up as a big win for GTCR.

The Chicago PE firm has hired William Blair to help with inbound interest for Paya, as well as evaluate growth options for the company, five sources said. Paya is producing $50 million Ebitda, which is expected to grow to $65 million in 2020, sources said.

Paya held a handful of meetings at Money20/20, one of the people said. GTCR was seeking 20x or $1 billion-plus for Paya, sources said.

Despite the meetings, GTCR is not running a formal process for Paya, sources said. There is “no plan or strategy or anything” regarding a sale, a second person, part of the five, said. Options for Paya include picking a financial partner, going public, selling, or doing more acquisitions as a GTCR platform, the second source said. A GTCR spokeswoman declined comment.

“You don’t hire a bank if you aren’t thinking about selling for real,” a third person, part of the five, said.

GTCR acquired Paya in 2017. The buyout shop paid $260 million cash for the company that was then known as Sage and $20 million in deferred compensation, Buyouts reported at the time. GTCR paid 7x Ebitda for Sage, the third source said. The PE firm committed to invest up to $350 million in company, Buyouts said.

Paya, of Atlanta, provides payment-processing and merchant-acquiring solutions in North America. The company processes over $30 billion in annual payment volume. (Sage Payment changed its name to Paya in January 2018.)

In July 2018, Joe Kaplan, CEO of Paya, died. GTCR picked Jeffrey Hack, former executive vice president and management committee member of First Data, as Paya’s CEO in November 2018. Paya, in June 2019, also tapped Mark Engels as its chief revenue officer and member of its executive leadership team. Engels is the former chief revenue officer of Hyperwallet’s payments platform. Paya has done two acquisitions during GTCR’s tenure. This includes buying First Billing Services in January 2019 and, in November 2018, acquiring Stewardship Technology, according to PitchBook.

GTCR has long been considered a fintech pioneer. The firm was one of the first investors of TransFirst, when the company was known as ACS Merchant Services, back in 2000. TransFirst was then sold to private equity firms in 2007 and 2014 before TSYS acquired it in 2016 for $2.35 billion. Other notable GTCR fintech deals include National Processing Center (which was ultimately sold to Vantiv, that acquired Worldpay for $10 billion in 2017 and was then sold this year to FIS for $35 billion) and Verifone (Francisco Partners bought Verifone for $3.4 billion in 2018).

GTCR is currently investing out of its 12th flagship, which closed on $5.25 billion in 2017.

William Blair and Paya could not be reached for comment.

News of William Blair’s hiring was previously reported by Mergermarket.

Action Item: See GTCR’s most recent form ADV here.