PrimeRevenue Interested in Acquiring Peers, Expects Consolidation in H2 2019

PrimeRevenue Interested in Acquiring Peers, Expects Consolidation in H2 2019

PrimeRevenue, an Atlanta, Georgia-headquartered provider of multi-bank supply chain finance services, is interested in acquiring fintech-led peers once the market begins to consolidate in the latter half of 2019, CFO Nathan Feather said.

“There is an opportunity in the near future for consolidation to happen,” Feather said. “A lot of players are not seeing the growth investors would like or having trouble turning the corner and getting the profitability and scale they need.”

PrimeRevenue will be well positioned to make acquisitions when the supply chain finance market begins to consolidate, Feather said.

The company is profitable and could acquire peers of equivalent or smaller size, he said. Depending on the size of the target, PrimeRevenue would finance acquisitions through a mix of cash, debt and additional equity financing. A small target could likely be acquired with cash alone, he said.

PrimeRevenue processes close to USD 200bn in payments per annum, so a small acquisition target would handle around 10%-20% of that figure, he said.

Of particular interest are targets with a strong footprint in markets where PrimeRevenue already operates. The company could also look at acquisitions in high-growth markets like Brazil, which can serve as a means of accelerating expansion efforts, he said.

The company works with suppliers globally but has relationships with buyers primarily based in Western Europe and North America, Asia Pacific and Australia, he said. To support these regions, it has offices in Atlanta, London, Prague, Melbourne and Hong Kong, he added.

In order to access markets with good growth potential but insufficient scale for PR to develop on its own, the US company has established partnerships with local companies. Partners include Mexico headquartered eFactor Network for Latin America and with Propell in South Africa, he said.

Venture capital Battery Ventures and financial services firm Brown Brothers Harriman (BBH Capital Partners), both have a 40% stake in PrimeRevenue, he said. The remaining 20% is held by the management team and employees, he added.

To date, the company has raised USD 115.6m across three equity financing rounds. The latest took place in April 2015, which saw PrimeRevenue raise USD 80m in a round led by BBH Capital Partners.

Feather declined to disclose the company’s financials.

Banks are among PrimeRevenue’s major competitors, with Citi [NYSE:C] being its number one rival in the US, he said.

Read the full article in Mergermarket here.