n May, a group of investors led by iPayment Inc. Chairman and Chief Executive Officer Gregory S. Daily finalized a buyout that enabled it to delist from NASDAQ just three years after going public. The deal was worth at least $771 million. The stock was converted for $43.50 in cash per share.

IPayment stock ceased trading on the close of business May 10, 2006.

Several analysts downgraded the company's stock following Daily's initial offer to pay $38 per share in May 2005, when the stock price had fallen by 40% since January. The board declined that offer in favor of seeking a third-party buyer to enable iPayment to remain public.

Twenty prospective buyers were invited to bid. Eleven were serious enough to sign confidentiality agreements allowing them to look over iPayment's internal financial reports. Only one, Summit Partners, submitted a bid ($42 to $44) that the board considered to be satisfactory. Summit stipulated that management personnel, including Daily, must roll over their shares. This proved to be a stumbling block.

In November, Daily told the board he was unwilling to sell his nearly 2 million shares to a third party at the price the company was seeking. The board offered to sell to Daily for $44 per share. Daily and iPayment President Carl A. Grimstad formed iPayment Holdings, which bought the outstanding shares with an equity commitment of $206.6 million from the executives and a financing commitment of $760 million from Bank of America Corp.

IPayment, a provider of credit and debit card-based payment processing services to 140,000 small merchants, continues operations as a privately held company. Daily cited the expense of operating as a public company as a motivation for delisting. Congress is considering changing the Sarbanes-Oxley rules for public companies with a market cap below $128 million, to reduce their accounting-compliance expenses. With a market cap of $209 million, iPayment would not have benefited from any changes.

In its most recent quarter, iPayment's net income rose 11% on revenue of $170.9 million, which was an increase of 4.6% over the year-ago period.