iPayment moving HQ to NY

Payment processor draws definitive line under Daily era, pays $13M for two merchant portfolios; GC to leave company at year's end

Updated at 3:10 p.m. with lease and staffing details

 

Less than three months after buying out former majority owner and CEO Greg Daily, iPayment is packing its bags for the Big Apple.

The payment processor announced its pending relocation to New York City as part of a smorgasbord of news that included its second-quarter results — a loss of almost $9 million that included more than $12 million in refinancing costs — the resignation of its general counsel and the addition of a hotel and real estate expert to its board.

Work already has begun on the move and is expected to be completed early next year. The company's headquarters, which is home to just a handful of people, takes up 4,700 square feet in the Burton Hills complex off Hillsboro Pike. iPayment's lease expires at the end of this year.

In a statement, CFO Mark Monaco said the relocation is "primarily driven by the opportunity for us to be very close to a large portion of our sales organizations, a significant number of our investors and other key constituents."

One exec who won't make the move is Executive Vice President and General Counsel Afshian Yazdian, who has been with the company since its founding a decade ago. Yazdian resigned from his positions last Friday, but will stay on until Dec. 31 to help with the relocation and the transition of his role. In the past, Yazdian was the GC for eConception and a mergers and acquisitions attorney at Waller Lansden Dortch & Davis.

iPayment's planned move comes shortly after a flurry of activity set off by the settlement this past spring of a California entrepreneur's lawsuit against Daily, which accused the payment industry veteran of scheming to deny him a stake in iPayment when the company was in its formative stages. Under the terms of that deal, Daily agreed to sell his stake in iPayment for about $120 million and to leave the company.

At the time, iPayment also execs said they planned to add three directors to their board. To that end, the company this morning announced that John Vickers is set to join its board Sept. 1. Vickers is chairman and CEO of Tishman Realty Corp. and Tishman Hotel Corp.

"John has distinguished himself through his extensive record of success at Tishman, and he brings over 25 years of business experience in the hospitality and real estate industries to iPayment," said Carl Grimstad, chairman and CEO of iPayment since the Daily buyout. "We are confident of John’s ability to contribute to the long-term growth of iPayment, and we look forward to working with him."

On top of its other news, iPayment also disclosed in its quarterly filing with the Securities and Exchange Commission that it has acquired two merchant portfolios from different sales organizations for a total of $13.5 million in cash. The deal add about 3,400 accounts to its books. At the end of 2010, iPayment worked with about 172,000 merchants across the country.

As for its Q2 results, iPayment's revenues rose slightly to almost $185 million, while revenues net of interchange were flat at $85.3 million. Operating income, which excludes the refinancing costs and higher interest expense, fell 20 percent to $21.3 million.