Lightyear buys eCommission from Milestone

Nearly four years after buying eCommission Financial Services Inc, Milestone Partners has sold the financial-technology company to Lightyear Capital.

Terms weren’t disclosed. Lightyear is buying roughly all of eCommission, three sources said. ECommission’s management, including Founder and CEO Sean Whaling, are retaining a stake, the sources said. The sale closed Aug. 29.

ECommission is a commercial factoring company. Founded in 1999, eCommission buys the commissions earned by real estate brokers, mainly on residential deals, that are expected to close. Transactions that are eligible for advances include pending residential sales, short sales, active listings and commercial resale properties. ECommission has financed nearly $1 billion in commission advances, a statement said. The Austin company employs about 30.

ECommission’s advances are not loans. The company will take a chunk, about 10 to 15 percent, of the amount the agent is seeking to advance as payment, one source said.

Milestone acquired eCommission in December 2013. The PE firm used its fourth fund, which raised $301 million in 2013, to invest in the company.

Milestone, Wayne, Pennsylvania, focuses on companies in sectors such as industrial, financial services and technology-enabled services. The lower-middle-market firm typically invests $5 million to $40 million equity per deal. In fintech, Milestone also owns Paylink Payment Plans.

“We have a lot of respect for the management team,” said Adam Curtin, a Milestone partner. “It was an enjoyable experience watching the company grow over the last few years.”

Milestone put eCommission up for sale earlier this year, tapping Stephens Inc to run a process. The auction drew PE firms and some strategics, a second source, one of the three, said.

Lightyear, New York, used its fourth fund to invest in eCommission, the third of the three sources said. The New York buyout shop is currently fundraising for the pool, which has so far collected $950 million, the source said. The firm expects to announce a final close of Fund IV later this year.

Lightyear targets middle-market financial services, including asset management, fintech and insurers in North America. Chairman Donald Marron founded Lightyear in 2000. Marron is former chairman and CEO of Paine Webber Group, which was sold to UBS AG in 2000 for $10.8 billion.

Bruce Miller and Blair Farinholt of Stephens advised eCommission. Pepper Hamilton was legal counsel.

Action Item: Call Milestone’s Adam Curtin at +1 610-526-2700

Photo of real-estate agent with sale sign courtesy of David Sacks/DigitalVision/Getty Images.