Gridiron Adds to Financial Compliance Platform

AML RightSource, a portfolio company of Gridiron Capital since September 2020, has acquired Arachnys Information Services.

AML RightSource is a Cleveland-based provider of “anti-money laundering” (AML), Bank Secrecy Act (BSA) and other financial crimes reporting and compliance services to both bank and non-bank financial institutions.

AML RightSource was founded in 2004 to assist small and medium-sized financial institutions in meeting regulatory compliance requirements – many new laws were enacted after the September 11, 2001 terrorist attacks – related to reporting suspicious financial activity, specifically criminal and terrorist-related. Since 2004, financial regulations have grown ever larger and more complex. Today, AML RightSource, led by CEO Frank Ewing, is one of the largest dedicated providers of AML services with more than 1,300 analysts and subject matter experts in five offices in Ohio (2), Phoenix, Buffalo and Toronto.

Arachnys is a provider of “know your customer” (KYC) and “anti-money laundering” (AML) compliance services. Customers of the company include financial institutions, asset and wealth management firms, FinTechs, insurance providers, pharmaceutical manufacturers, oil and gas companies, and commercial real estate firms.

KYC laws were introduced in 2001 as part of the Patriot Act to mandate that financial institutions identify and verify a client’s identity when opening an account and monitoring the client’s transactional behavior post account opening. KYC laws reduce the risk of identity theft, money laundering, financial fraud, and the financing of criminal organizations.

Arachnys, led by founder and CEO David Buxton, was founded in 2010 and is headquartered in London with an additional office in New York City. Post-closing, Mr. Buxton will continue to lead Arachnys and will join AML RightSource as its Chief Product Officer.

“We are delighted to be joining forces with David and his team to expand our capabilities and geographic footprint,” said Mr. Ewing. “Arachnys has developed a differentiated suite of data and software solutions that, combined with our proven delivery model, will allow us to better arm our clients with the tools and technology needed to fight financial crime.”

“David and his team bring an innovative approach and an intelligent data platform that will help AML RightSource continue to accelerate growth and expand its abilities to partner with clients globally,” said Will Hausberg, a managing director at Gridiron.

“We are excited to welcome Arachnys to the AML RightSource team as we continue to build out its end-to-end, tech-enabled platform,” said Tom Burger, a co-founder and managing partner at Gridiron.

Gridiron invests in manufacturing, service, and specialty consumer companies with enterprise values from $75 million to $575 million and EBITDA from $8 million to $50 million. Sectors of interest include branded consumer, business-to-business and business-to-consumer services, and niche industrial.

New Canaan, Connecticut-based Gridiron held a hard-cap and oversubscribed closing of its largest fund, Gridiron Capital Fund IV LP, in December 2020 with $1.35 billion of capital.

© 2021 Private Equity Professional | March 12, 2021

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