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The Green SheetGreen Sheet

The Green Sheet Online Edition

June 09, 2008 • Issue 08:06:01

FirstLook
Perfecting the art of portfolio sales

MerchantPortfolios.com Logo

Merchant Portfolios.com

Lane P. Gordon, Managing Partner
Adam Hark, Partner
481 Beacon Street, Suite 12A
Boston, MA 02115

Phone: 866-448-1885, ext. 307/308
Fax: 508-638-6444
E-mail: lane@merchantportfolios.com
Web site: www.merchantportfolios.com

When Lane Gordon and Adam Hark launched the MerchantPortfolios.com Web site in December 2007, their enthusiasm for the niche they had carved overshadowed initial skepticism from industry consultants who asked if buyers and sellers in the payments sphere needed an intermediary.

"This is one of the very few industries that companies, especially ISOs, start with the intention of selling right from the date of inception," said Gordon, Merchant Portfolio's Managing Partner. "Coupled with the fact their revenue streams can be quantified using a spreadsheet makes it a very interesting and fluid market."

Gordon entered the payments arena six years ago as an investor for a small ISO. He became more involved with the company when he saw the "level of activity in the space relative to the deals that were out there with regard to recurring, predictable revenue streams."

Hub for buyers and sellers

MerchantPortfolios.com is a full-service merger and acquisition firm brokering transactions on behalf of sellers in the payments and ATM-ISO industries. It provides an online marketplace for buyers and sellers of transaction processing and ATM portfolios, residuals, and ISOs.

According to Hark, a Partner in the business, the motivation behind the venture was to "maximize the selling price of merchant and ATM portfolio assets by getting as many buyers as possible to not only see them, but compete for them as well."

Hark and Gordon believed the traditional model of portfolio sales, in which sellers contact two or three potential buyers and try to negotiate the best deal, was inefficient.

"We do a tremendous amount of work behind the scenes to verify and validate that not only is a buyer legitimate and hopefully has made some degree of acquisition in the past, but that they are qualified to do an acquisition today," Gordon said. "And therein lies a fundamental problem with uninformed buyers who think they are shrewd negotiators.

"In the end, these guys are leaving a lot of chips on the table from dealing with companies who may not offer the best price because they've already spent their acquisition funds for the year."

Hands on the pulse

Gordon and Hark constantly re-evaluate the qualifications of potential buyers. Thus, MerchantPortfolios.com provides a unique, up-to-date window in terms of portfolios, residuals and ISOs potentially available for purchase in North America and Europe.

The partners said that, since their Web site has been up, they have helped large processors and ISOs with 15,000 to 20,000 merchant accounts to smaller ISOs with fewer than 1,000 merchants.

And by providing an online marketplace to hundreds of buyers simultaneously, sellers get maximum exposure.

"Once we have something that's for sale with us, we'd like to think that we can present it and get it out as fast as possible to the widest selection of qualified buyers," Gordon said.

"Then we can very quickly determine within that group, on behalf of the seller, who will be the absolute best fit for their particular ISO, residual, ATM or merchant portfolio." end of article

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