Sold to GTCR, SPS will retain ties to Sage Group

A month after confirming during an earnings call that it would divest Sage Payment Solutions Inc., U.K.-based Sage Group PLC entered into a definitive agreement with private equity firm GTCR under which GTCR will acquire Reston, Va.-based SPS for $260 million.

"GTCR is partnering with SPS management to pursue organic growth initiatives and fund future acquisitions in the payment processing industry," GTCR stated in a press release about the transaction. "To support this strategy, GTCR has committed up to $350 million of equity capital to the platform. The transaction is expected to close in the third quarter following receipt of regulatory approvals and other consents."

SPS focuses on the small and midsize business (SMB) sector in the United States and Canada. The company stated it serves a diverse client base of approximately 100,000 SMBs and provides credit card, automated clearing house, check, and gift and loyalty card processing services in the United States and Canada. Its payment solutions are designed to integrate with merchants' business management software and enable them to securely accept electronic payments through multiple channels, including card-present, ecommerce and mobile.

Stretegic alliance

Sage Group will remain strategically and financially connected with SPS, having entered into an alliance to facilitate ongoing cooperation. "Under the terms of this alliance, SPS will be the preferred provider of merchant processing services to Sage clients in the United States," the companies stated. "SPS and Sage will work to provide a superior payments experience to mutual customers through seamless technology integration and exceptional service. SPS and Sage have pledged to work together to maintain the integration of technology and systems. Sage will retain a financial interest in SPS in addition to the strategic alliance and other commercial agreements between the parties."

Collin Roche, Managing Director at GTCR, added, "SPS has a leading platform with robust software integrations in attractive end markets. We intend to invest further in the technology and offer additional innovative solutions to SPS customers and partners. GTCR's long history of investing in payments and extensive experience in corporate carve-outs provides us with a differentiated perspective on the Company, and we are excited to bring significant resources and expertise to help fuel the next phase of SPS's growth."

GTCR noted that it had arranged fully committed financing for the transaction from Antares, Ares, Jefferies, Barclays and NXT.

Our prior coverage on Sage Group's rationale for divesting SPS is posted here: www.greensheet.com/breakingnews.php?flag=breaking_news&id=1825About SPS

Editorial Note:

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