UK mid-market firm Palamon Capital Partners has sold fraud prevention technology company Retail Decisions to payments group ACI Worldwide for $205 million, booking a 2.5x return.
Palamon took the UK-headquartered Retail Decisions (ReD) private back in 2006, alongside co investors Morgan Stanley Alternative Investment Partners and AlpInvest. It was the largest investment the firm made from its €670 million 2006-vintage fund, Palamon European Equity II.
Following the global financial crisis, Palamon was able to de-leverage ReD and return 80 percent of its invested equity through three separate division sales: the UK fuel cards business in August 2009, the Australian businesses in September 2010 and the European fuel card business in March 2011, according to a statement.
Palamon then hired Paul Stanley as chief executive of ReD in mid-2011 to launch several new business lines and expand its partner base around the world. It has since established relationships with big payments companies such as Global Collect, First Data, Sage Pay, Yapital, and PayU.
“ReD has been a highly successful result for Palamon,” said Fabio Massimo Giuseppetti, partner at Palamon, in a statement. “We successfully delivered on our investment thesis by backing a highly scalable SaaS business model with transaction-based revenue and we are delighted with the results achieved.”
Fund II now has 8 companies still in the portfolio, including IDH, an NHS dental practice group, and OberScharrer Group, an ophthalmic healthcare business in Germany.
Last September, Palamon closed a new €210 million 'auxiliary' fund, Palamon Auxiliary Partnership 2013, which was designed to give the firm some additional capital to invest while postponing a full fundraise until it had been able to deliver some more exits from the portfolio.