TA Associates Invests in AffiniPay in Latest Deal in Payments
TA Associates has won an auction for the firm, which is expected to sell for 20x ebitda
By Luisa Beltran Tuesday February 25, 2020 10:27 am
AffiniPay, a payments company, looks like it will continue to be backed by private equity.
TA Associates has won an auction for the firm, five people familiar with the matter said. Private Equity News' sister title Barron’s reported in December that the business, which produces $30m a year in earnings before interest, taxes, depreciation and amortization, was up for sale.
The company was expected to sell for 20 times Ebitda, Barron’s said in December. Raymond James was advising on the auction.
Amy Porter founded AffiniPay in 2005. The Austin, Texas, company provides payments technology for specific industries such as law and accounting. It processes more than $6bn annually for more than 60,000 users, including the Alabama State Bar, the Louisiana State Bar and the ASPCA. In June, Porter, who was AffiniPay’s CEO, became executive chairman. Tom West took over as CEO, a statement said at the time.
Payments companies, which typically process transactions between merchants and customers, have emerged as one of the hottest sectors in financial technology. Last year saw several large payments transactions: Global Payments bought TSYS for $21.5bn, Fiserv acquired First Data for $22bn, and Fidelity National Information Services snapped up WorldPay in a $35bn deal. Mastercard bought Nets for $3.19bn in August.
More recently, Visa agreed in January to buy Plaid for $5.3bn. Plaid isn’t a payments company but provides the technology to enable consumer payments.
TA, of Boston, is a longtime investor in payments companies. The private equity firm acquired BluePay, a payment processor for merchants, in 2013. Four years later, in 2017, it sold BluePay to First Data for $760m. TA also invested in BillDesk, an Indian payments company, in 2012, and in Financial Information Technologies, which provides invoicing and electronic payments to alcoholic beverage retailers and distributors, in 2018. Last year, TA’s 13th flagship fund raised $8.5bn.
Great Hill, which sold its stake in AffiniPay, invested in the company in 2015. The private equity firm recently acquired a majority of One Inc., an insurance payments provider, Barron’s reported Feb. 20. Great Hill is investing out of its seventh growth buyout fund, which closed on $2.5bn in July.
Great Hill, of Boston, invests in sectors including software, financial and healthcare technology. The firm typically invests equity ranging from $40m to $250m per deal.
A spokeswoman for Great Hill declined to comment. AffiniPay, Raymond James and TA didn’t respond to calls or messages for comment.