GALWAY-BASED financial payments group Fintrax Group Holdings Ltd has been sold for €170 million to the company’s management team and Exponent Private Equity.
The deal will net its founder Gerry Barry and his family €119 million for their 70 per cent stake in the business. The balance of the company was owned by a small number of senior executives who are reinvesting in the deal.
It is understood that Mr Barry will cut his ties with the company but that the other senior management will remain with the business.
Founded in 1985, Fintrax is the world’s second biggest player in processing tourist VAT refunds on behalf of retailers and governments.
It completed about 3.7 million of these transactions last year using the Premier Tax Free brand, which services more than 80,000 retailers worldwide. This returned about €225 million to international travellers in 2011.
Fintrax also provides multicurrency payments and processing solutions for banks and retailers. It earns commissions for each transaction.
The company is headquartered in Galway and employs more than 400 people across 26 countries.
Exponent is providing the financial backing for the deal and has appointed John Moore as chairman. Mr Moore is a former executive with computer maker Dell and has worked with Exponent for a number of years. He also chairs investee companies Gorkana Group and Group GTI.
The information memorandum circulated to interested buyers forecast that Fintrax’s net income would rise from €37.4 million in 2011 to €46.2 million by the end of next year.
Earnings before interest, tax, depreciation and amortisation is predicted to rise from more than €13 million to €19.8 million over the same period.
Commenting on the deal, Catriona O’Farrell, chief executive of Fintrax, said: “This investment will propel Fintrax on to the next stage of our plan for growth and development.”
Richard Lenane, a partner at Exponent, said the group would “support” the management team as it continues to roll out its “market-leading technology and invest to further expand the business in new markets”.
Exponent typically invests in businesses with an enterprise value of between £75 million and £350 million.
Formed in 2004, it deployed its first fund of £400 million in nine investments before raising a second fund of £800 million, from which it is currently investing.
Exponent recently acquired Quorn Foods, the meat-alternative business, from Premier Foods.
Fintrax was advised on the transaction by Dublin-based Raglan Capital. It is understood that 10 groups submitted final bids for the Irish business by the June deadline.
Facts about Fintrax: Founder’s background
Fintrax founder Gerry Barry, said yesterday it was “the right time to pass on the baton”, having founded the business in 1985.
“I am delighted that the group’s new investor, Exponent, in conjunction with the existing Fintrax management and staff, will continue to grow the group and no doubt help it to reach new heights,” he added.
Barry keeps a low media profile. He has a BSc in physics and held top management positions with British and US multinationals. He pioneered the cashback tourist tax refund concept, which was launched in Ireland in 1985. From 1990, this business was expanded throughout Europe, and it has since expanded into other areas of financial payments processing.
In 2000, Barry established the company’s headquarters in Galway and rebranded it as Fintrax. The company’s website also credits Barry with being the inventor of a “unique portfolio of patented solutions for electronic tax refunding and automated card payment processing”.
He is the managing partner of the Barry Family Partnership, which was the majority shareholder of Fintrax.
