Warburg buying local payment processor

Report pegs price at more than $1B

Private-equity firm Warburg Pincus has signed an agreement to buy Nashville-based corporate payment processor Electronic Funds Source from an investor group comprising First Data, CTP Holdings and FJ Management, the former Flying J.

Electronic Funds Source is the result of mergers in late 2011 and the fall of 2012 that united TCH LLC, a company founded in 1998 by Flying J, with the transportation business of First Data and the T-Chek Systems unit previously owned by C.H. Robinson Worldwide. (The second deal was worth more than $300 million and valued T-Chek at almost six times revenues.) The company, with cards now accepted at more than 11,000 locations in North America, runs its home office out of One American Center on West End Avenue.

The companies involved did not disclose the terms of their transaction, but a Reuters report earlier Wednesday pegged the deal's value at more than $1 billion.

"We are excited to partner with Warburg Pincus and look forward to leveraging their deep expertise and strategic insights in the areas of payments and financial services. This transaction enables us to move forward as an independent company and focus on a wide variety of opportunities for growth to benefit our customers," said EFS President and CEO Scott Phillips, who joined the company in 2011 after spending almost two decades at Comdata.

The transaction, which still needs some regulatory approvals, is expected to close later this quarter.

"We believe there is a significant opportunity to build on EFS' success and enhance and expand its fleet and corporate payments solutions," said Jim Neary, managing director and member of Warburg Pincus' executive management group. "We look forward to partnering with Scott and the management team as the Company continues its impressive growth trajectory."