Founder-CEO Greg Daily
Updated 4 March 2019 - i3 announced making two acquisitions of companies with undisclosed identities in an 8K today, for an aggregate $20MM expenditure,and said it has a 3rd deal still in diligence. Filing here. i3 announced it acquired 28 November 2018 - i3's 4Q2018 8K here. Earlier: i3's 3Q18 report here. 21 June 2018 - Trading today IIIV stock pops see here. This morning, i3 filed its initial prospectus here, projecting an IPO price of $86.4MM @ $13 and proceeds before expenses of $80.4MM. Underwriters have overallottment option up to 997,500 shares. Much of IPO proceeds goes to paying-off debt. Ahead of the notice, Nasdaq approved the listing and Renaissance Capital (Greenwich CT) issued and Early Take analysis here, estimating an initial market value north of $300MM. On July 11, i3 amended its filing to reflect a proposed $99.4MM IPO, based on a proposed 7.6MM Common to be registered at its proposed max offering price of $13. The company awaits a go-effective order. Our original May 25 story follows. -Ed.
SERIAL fintech-payments entrepreneur Greg Daily today shelf-registered an S-1 with the Securities and Exchange Commission (SEC) covering a proposed initial public offering of Class A Common stock of i3Verticals Inc., a holding company that will do business through i3Verticals LLC and subsidiaries, thereof.
The filing explains that (contingent upon the SEC issuing a go-effective order for actual trading) the "emerging growth company" expects to list on the NASDAQ Global Select Market under the symbol "IIIV." i3Verticals Inc. was formed in Delaware, this past January. S-1 here.
Asked this afternoon for comment on the filing, Founder, Chairman and CEO Daily declined. See Venture Nashville's previous coverage of Daily and i3 here.
Given the current relative scarcity of IPOs across the U.S. economy, and given other recent Fintech and financial services developments in Nashville -- e.g., plans for establishment of AllianceBernstein's headquarters here and the earlier formation of FINTOP Capital -- Daily's move toward an IPO seems auspicious. Other VNC fintech coverage here.
The S-1 and numerous other fresh i3 Verticals Inc. filings speak to an array of interrelated transactions, including one involving Fairway Payments LLC, based in Alexandria, Va., acquisition of which i3 has closed, according to an SEC filing.
Though today's shelf registration provides neither hints of the intended magnitude of capital to be raised through the public offering, nor signals share pricing or correlated fees associated with the proposed IPO, notes related to the Fairway relationship suggest i3's public offering might be expected to yield a minimum $13MM. i3's actual IPO target is likely substantially larger than that, given its M&A ambitions.
The i3 management team also includes CFO Clay Whitson and Chief Technology Officer Rob Bertke. President Rick Stanford holds the M&A portfolio. The company says it has made nine platform acquisitions and 12 tuck-in acquisitions since inception in 2012.
VNC interpretation of data in today's report suggest that at the end of March the company was generating net revenue at an annualized rate north of $300MM.
For a recently ended six-month period cited by the company in today's report, i3Verticals reported net loss of $7.2MM and $14.6MM adjusted EBITDA. Its March 31, 2018 balance sheet results show the company then held $755,000 cash, unaudited.
As of May 20, i3 Verticals Inc.'s board of directors included:
Gregory Daily - 59 - Chief Executive Officer and Chairman
Clay Whitson - 60 - Chief Financial Officer and Director
Rick Stanford - 57 - President
Robert Bertke - 49 - Chief Technology Officer
Scott Meriwether - 36 - Senior Vice President -- Finance
Paul Maple - 44 - General Counsel and Secretary
Elizabeth Seigenthaler Courtney - 54 - Director
John Harrison - 61 - Director
Burton Harvey - 54 - Director
Timothy McKenna - 64 - Director
David Morgan - 66 - Director
David Wilds - 78 - Lead Independent Director
Today's filing recounts, in part, that the company was founded in 2012 to deliver integrated payment and software solutions to small- and medium-sized businesses ("SMBs") and organizations in strategic vertical markets -- primarily the Education, Non-profit, Public, Property Management and Healthcare arenas.
The company also says it has "a growing presence in the business-to-business ("B2B") payments market." It reports having processed approximately $10.3BN in total payment volume in 2017, and asserts it has booked a compound annual growth rate (CAGR) of 67% since 2014.
Its distribution partners included 22 independent software vendors as of Sept. 30, 2017, and the company says it seeks significant gains by building its presence in what it says is the under-penetrated B2B payments market, the maturatation of which it says has lagged that of the B2C payments sector.
The cluster of recent filings to which i3 is party shows a wide range of professional advisors around the table for varied IPO, loan, organization and related issues.
Some financing activities drew upon Claritas Capital Specialty Debt Fund; Capital Alignment Fund; Harbert Mezzanine Fund, and entities related to those firms. [Update: Nashville's Capital Alignment Fund III reported June 4, 2018, it had raised $103.7MM toward a $150MM goal.]
Among advisors named in one or more filings: attorneys with Bass Berry & Sims; Waller Lansden; Bradley Arant; and, Nelson Mullins.
Also showing their flags in some documents: Accountants BDO; and, banks and advisors including Bank of America Merrill Lynch; Regions; Fifth Third; Wells Fargo; Access National Bank; First Bank; Pinnacle Bank; Capstar; Franklin Synergy; Tennessee Bank & Trust; and, JP Morgan Chase.
Addressing competitive factors, the company's S-1 says, the company notes a wide range of sector and segment entrants, including Bank of America Merchant Services, Chase Paymentech, Elavon, Inc. (a subsidiary of U.S. Bancorp), First Data Corporation, Global Payments, Inc., WorldPay, Inc. and Total Systems Services, Inc.
The company noted that it also competes with other vendors targeting distribution partners sought by i3Verticals, such as Stripe, Inc., Square, Inc., PayPal Holdings, Inc., Braintree (owned by PayPal), Adyen, Ltd., and OpenEdge (a division of Global Payments). VNC
. Last edited 0952 26 May 2018