Amadeus recently ended its pursuit of Shift4 Payments after the Spanish travel technology group was unable to meet Shift4’s valuation expectations, said five sources familiar with the matter.
The Allentown, Pennsylvania-based fintech company has been looking to sell for more than USD 2bn, a tough ask for many suitors, some of the sources said. Shift4’s focus on providing software-enabled payment services to the hospitality and leisure industries would have aligned with Amadeus’ existing travel payments business.
Searchlight Capital-backed Shift4 has received significant inbound interest from potential bidders but is in no rush to sell as it sees considerable future upside, said two of the sources. One of these sources said that Shift4 gave serious consideration to the interest but has elected to end talks for the time being as it focuses on running the business.
Founder and CEO Jared Isaacman told this news service that Shift4 has had select conversations with suitors, but said that an IPO is a more likely option in the future. He added that private equity firms are unable to meet the company’s valuation expectations.
Searchlight formed Shift4 Payments in 2018 when it completed a deal to merge existing portfolio company Lighthouse Network with Shift4. It first invested in Isaacman’s Lighthouse in 2016.
This news service reported in November that Shift4 was working with Financial Technology Partners to consider a sale. In a follow-up report in February, sources said that Shift4 was projected to generate USD 150m in EBITDA for 2019 and was aiming to collect initial bids in March.
TSYS and Vista Equity Partners are among the firms that have shown interest in Shift4, several of the sources said. Some of these sources said that TSYS found Shift4’s asking price to be too high.
Columbus, Georgia-based TSYS has been using acquisitions to expand its payment processing services for merchants, including the USD 1bn purchase of Parthenon Capital Partners’ Cayan and a USD 2.3bn deal for Vista-backed TransFirst.
CEO Troy Woods told investors in April that TSYS is interested in continuing to gain scale in its core businesses but does not feel that it is missing any technology that it needs to compete as the fintech sector consolidates.
Along with TransFirst, Vista backs major fintech group Finastra through its main investment fund and Upserve via its lower middle market fund. Any Shift4 deal would likely have been independent of Finastra, two of the sources said.
Upserve offers point of sale and payment processing solutions for restaurants, potentially offering an opportunity to cross-sell with Shift4, two of the sources said.
Amadeus and Searchlight declined to comment. Vista and TSYS did not return requests for comment.