Portfolio and Enterprise Sales

Our M&A advisory services are designed to assist clients through the entire M&A process, from strategic planning through closing. Our services are divided into two phases: preparatory consulting, which occurs before the purchase or sale (Pre-M&A), and transaction advisory, which is performed throughout the purchase or sale process.

We provide M&A advisory services to a wide range of clients from private equity firms and investment funds to payments processors, banks, ISOs, gateways, payfacs, ACH, Real-Time-Payments, and Account-to-Account platforms.

Buy-side M&A

Two factors are driving the buy-side transactional activity in the merchant portfolio space today:

  • The ubiquity of private credit

  • Vertically adjacent technologies

The amount of capital available, in terms of private credit, to medium-to-large size merchant acquirers to deploy for acquisitions is staggering. This, along with a variety of newer lending models, from cash flow-based to revenue-based origination, has provided an entry point for many heretofore smaller companies, to go out and compete for acquisitions with their larger industry competitors and private equity groups. So, even though valuations based on future cash flows have normalized, the competitive landscape (number of buyers) for quality merchant portfolio assets has expanded. As a result, valuations remain competitive, and the greatest value generated through a transaction is achieved where the buyer has a strategic interest – usually to upsell another technology.

Post-pandemic, there exists an expansive market of technology providers who are keen to acquire merchant portfolios to sell their core technology into. Vertically adjacent technologies ranging from SaaS-based business management solutions to alternative lending, are funded and hungry for these niche payment assets.

Whether you are starting to map out your growth strategy (which includes acquisitions) or need the niche payments expertise to properly diligence an already found merchant portfolio or ISO target, Merchant Portfolios’ analysts and bankers provide a powerful addition to your corporate development team. 

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Pre-M&A Advisory Services

  • Understanding current market conditions and dynamics (market liquidity, multiples, value drivers of buyers)

  • Valuation

  • Buyer targeting (formulating buyer profiles)

  • Development of preferred deal structure and consideration

M&A Advisory

  • Creation of offering memorandum

  • Marketing and presentation of enterprise or asset to acquirers

  • Financial modeling

  • Facilitation of due diligence process

  • Acquirer qualification

  • Acquirer negotiation

  • Deal management, facilitation, and tracking

Payments companies find themselves exposed to many cross-currents today which affect valuations and strategy, including the merchant relationship ownership, cash discounting, stablecoins, open banking, RTPs, and the green shoots of generative AI deployment. Whereas just a few years back, M&A strategies were well established and intuitive, today’s environment adds a new dimension of complexity. 

Buying and selling merchant portfolios, residuals and/or ISOs requires a more thoughtful approach, one that requires not just baseline KPI and financial analysis, but proper market positioning, timing, and understanding the true value of an asset before making a buy.