Parthenon to sell Cayan for $1.05 bln, expects 15x its money

Just 20 months after closing its buy of TransFirst, TSYS is scooping up another PE-backed fintech company.

The global credit-card processor said Dec. 18 that it would buy Cayan for $1.05 billion cash. Parthenon Capital Partners is the seller. The deal is expected to close in Q1.

Cayan, Boston, provides services to more than 70,000 merchants. It employs 444 people. TSYS executives on a conference call described Cayan’s Genius platform as “one of the best software integration solutions in the market.” Cayan CEO Henry Helgeson is staying with the company, said Emily Edmonds, a TSYS spokeswoman. She declined further comment.

TSYS completed its previous big deal, the $2.35 billion acquisition of TransFirst, in April 2016. Vista Equity Partners was the seller.

Cayan was a more than five-year hold for Parthenon. The buyout shop bought Cayan in July 2012. Parthenon stands to make more than 15x its money on the sale, a source said.

The deal is the latest involving a cash-rich strategic buying a sizable U.S. payments company. Many times, the targets are PE-owned. First Data, which was interested in Cayan, closed its $760 million acquisition of BluePay Processing on Dec. 1. TA Associates was the seller. First Data also bought CardConnect, which was backed by FTV Capital, for $750 million in July.

Vantiv in August agreed to buy WorldPay for $10 billion, which was owned by Bain Capital and Advent International until its 2015 IPO. Vantiv this year also bought Paymetric, a Francisco Partners portfolio company. In the Cayan process, PE couldn’t compete with the high prices offered by strategics, sources have told Buyouts.

The trend has forced large U.S. buyout shops to seek payments deals abroad. In September, Hellman & Friedman agreed to buy Nets, a Nordic payment processor, for $5.3 billion. Blackstone and CVC Capital Partners in August inked a $3.9 billion buy of Paysafe Group.

Cayan is the latest exit for Parthenon. The firm this year sold Bracket, a provider of technology-driven clinical-trial-support services, to Genstar Capital in March. In April, HMS Holdings completed its $172 million buy of Eliza Corp, a health engagement management and member analytics firm, from Parthenon.

Founded in 1998, Parthenon targets middle-market companies in financial, healthcare and business services. The buyout shop closed its fifth flagship fund at its $1 billion hard cap in 2016. Parthenon’s fourth pool raised $700 million in 2012.

Steve McLaughlin of FT Partners advised Cayan on the auction, while Kirkland & Ellis was legal adviser. Matt Sharnoff of B of A Merrill Lynch and James Babski of Greenhill & Co provided financial advice to TSYS. Alston & Bird was attorney for TSYS.

Executives for Parthenon and Cayan could not be reached for comment.

Action Item: Contact Cayan CEO Henry Helgeson at +1 844-277-1008

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