Welsh, Carson, Anderson & Stowe (WCAS) has completed the previously announced sale of its portfolio company, TransFirst Holdings, to Vista Equity Partners for $1.5 billion. WCAS acquired TransFirst from GTCR in June 2007. The WCAS equity investment in TransFirst generated a total gain $678 million, representing a 4.1x investment multiple and a 23% internal rate of return.
TransFirst is a provider of secure transaction processing services and payment technologies to the small- and medium-sized business (SMB) market. In 2013, the company served more than 200,000 merchants and processed $42 billion in volume, ranking it as the seventh largest non-bank merchant acquirer in the US. The company has operating facilities in Aurora, CO; Broomfield, CO; Franklin, TN and Cypress, CA. TransFirst was founded in 1995 and is headquartered on Long Island in Hauppauge, NY (www.TransFirst.com).
“We are very proud of, and thankful for, the close partnership we have had with John Shlonsky and the entire TransFirst management team during the past several years. The company and team have demonstrated high integrity, an innovative spirit, tremendous operating rigor, and dedication to delivering exceptional service to TransFirst’s clients and partners,” said Eric Lee, General Partner at WCAS. “We wish TransFirst every success in the future with Vista Equity Partners.”
WCAS is focused exclusively on investments in business, information and healthcare services. Since its founding in 1979, Welsh Carson has organized 15 limited partnerships with total capital of over $20 billion. The firm is currently investing through its latest fund – Welsh, Carson, Anderson & Stowe XI – and is currently raising its 12th fund with a $3 billion target. The firm is based in New York (www.welshcarson.com).
WCAS has completed a number of successful exits during 2014. In addition to TransFirst, WCAS has sold GlobalCollect, Solstas Lab Partners, Peak 10 and Matrix Medical this year. WCAS also completed the initial public offerings of Paycom Software (NYSE: PAYC), and K2M Group Holdings (Nasdaq: KTWO) in 2014. Including pending transactions, WCAS has generated distributions to investors of approximately $5.5 billion since the beginning of 2013. This has resulted in WCAS’s investors receiving $5.41 of distributions for every $1 of capital called.
Vista Equity Partners, the buyer of TransFirst, has more than $13 billion in committed capital and makes equity investments in enterprise software businesses and technology-enabled services companies. The firm was founded in 2000 and has over 50 investment professionals operating out of San Francisco, Chicago and Austin (www.vistaequitypartners.com).
“We are very excited to enter our next phase of growth.” said TransFirst CEO John Shlonsky. “We thank Welsh, Carson, Anderson & Stowe for their strong partnership and invaluable contributions to TransFirst’s success.”
2014 PEPD • Private Equity’s Leading News Magazine • 11-13-14