Former iPayment boss Greg Daily is back in the payment processing business and has acquired a Georgia company with an eye on deploying $100 million on acquisitions and going public in the next few years.
The vehicle for Daily’s latest venture, Charge Payment LLC, last month paid an undisclosed amount in cash for Trust One Payment Services, an eight-year-old company with about 2,800 merchant clients and an annual charge volume of $700 million. Trust One President Rob Cason says the goal is to grow Charge Payment’s client base to 50,000 in relatively short order, helping to consolidate a growing industry that still has hundreds of smaller players.
Cason said he had been courted last year by a handful of other prospective buyers before being put in touch with Daily in October. The men quickly found common ground and moved forward with their transaction.
“We share some ideas and believe in the same core principles,” Cason said. “We just hit it off.”
Daily, who has since the mid-1980s grown both PMT Services and iPayment into major industry players with more than $10 billion in charge volume, is charting a similar course with Charge Payment. Helping him buy Trust One was local investment firm First Avenue Partners, whose managing partner David Wilds was for years iPayment’s lead director. From here, Daily plans to raise a mezzanine round before raising money from other area investors. The time frame for raising and spending the $100 million goal and prepping a trip to the stock exchange is about three years.
“The industry is as exciting as it’s ever been,” Daily said. “It still has some exciting growth aspects to it.”
One twist versus his past ventures: Rather than sign on small and mid-sized merchants of all stripes and then having to deal with higher-than-desired attrition rates, Charge Payment will focus on about 10 industry verticals — such as health care technology, hospitality or software development — and go after sales organizations with established client bases there. That will give Daily a clearer narrative to pitch to investors.
“I loved building PMT and iPayment, but it was hard to tell our story by the time we got to Wall Street,” he said. “This time, I want to be able to better describe what we do.”
Trust One, which employs 15 full-time and works with almost 30 salespeople, will remain at its offices west of Atlanta. Beyond that, Daily is keeping the Charge Payment team small for now. Cason will oversee daily operations from Georgia while operations and sales veteran Rick Stanford, with whom Daily worked at PMT, is helping scout the market for M&A opportunities.
Even if Daily and Cason are successful in getting Charge Payment to 50,000 merchants, the company will be a relatively small player. iPayment, which is now based in New York City, works with about 190,000 merchants and employs more than 300 people.
Daily left iPayment in the spring of 2011 after being forced to sell his two-thirds stake in the company to co-founder Carl Grimstad. That sale was prompted by the settlement of a $350 million wrongful conduct claim against him by a California entrepreneur.