Parthenon’s deal for Institutional Cash Distributors was actually a buyout

Parthenon Capital Partners’ investment in Institutional Cash Distributors was more than just a growth investment. In fact, the San Francisco buyout shop acquired a majority of ICD, according to CEO Tory Hazard.

ICD Founders Ed BaldryJeff Jellison and Tom Newton, along with management and employees, retained a minority, Hazard said.

“Parthenon was the best fit for us,” Hazard said of the ICD auction last year that was run by Raymond James. Bidders included private equity groups and strategic investors.

Parthenon announced the transaction in October, calling the deal a growth investment. Madison Capital Funding said Jan. 19 it provided debt to finance Parthenon’s control recap of ICD.

ICD, also San Francisco, is a money-market-fund portal. Founded in 2003, the company provides an SaaS platform that enables corporations to trade and manage their risk for short-term investments like money markets, said Hazard. ICD services more than $100 billion in assets; Google and Apple are clients. ICD had no debt when it went up for sale, Hazard said.

Hazard said he is staying with ICD along with the rest of management. ICD, which employs more than 60 people, hopes to increase its staff to about 80 over the next two quarters, he said. “We’re looking to hire in technology and sales and sales support,” he said.

Founded in 1998, Parthenon invests in middle-market companies in sectors including financial services, healthcare services and business services. The PE firm targets companies with enterprise values between $35 million to $500 million. Parthenon closed its fifth flagship fund in 2016 at its $1 billion hard cap.

In December, Parthenon agreed to sell Cayan to TSYS for $1.05 billion and is expected to make 15x its money on the deal.

Brendan Ryan and Paul Fricilone of Raymond James advised ICD.

Executives for Parthenon could not be reached for comment.

Action Item: Contact Tory Hazard at +1 415-820-5302

A man walks through light rain in front of the Hey Google booth under construction at the Las Vegas Convention Center in preparation for the 2018 CES in Las Vegas on Jan. 8, 2018. Photo courtesy Reuters/Steve Marcus