There will soon be a wave of financial technology carve-outs from banks, who are being pressured by regulators to divest non-banking assets, predicts Doug Bergeron (pictured), former CEO of VeriFone Systems Inc. (NYSE: PAY). To take advantage of the assets coming to market, Bergeron and Chicago private equity firm GTCR LLC, who teamed up on VeriFone, have reunited to form an ambitious company called Opus Global Holdings LLC.
Headquartered in Palo Alto, Calif., Opus plans to buy financial technology companies and expand them internationally. "The existing financial technology and payments ecosystems are rapidly evolving but remain highly fragmented with limited interoperability and little opportunity to leverage enterprise-wide data," says Bergeron. "We see an opportunity to successfully consolidate and globalize best-in-breed products for worldwide deployment while leveraging data across applications. We intend to assemble a leading, global financial technology company, and to develop a worldwide distribution network of partners, distributors and employees."
Bergeron will serve as CEO and invest $50 million in the company. GTCR will invest up to $450 million from its 10th fund, which has $3.25 billion in committed capital.
Bergeron previously led Gores Technology Group's acquisition of VeriFone from Hewlett-Packard Co. (NYSE: HPQ) in 2001, and with backing from GTCR in 2002, built VeriFone into a payments company with operations in more than 100 countries. Bergeron took the company public in 2005.
"VeriFone was a great success previously with Doug," says GTCR managing director Collin Roche. "He is a bright, passionate, energetic manager who has mastered the full array of competencies. He is a very well-rounded manager who is customer-first and sales-oriented. In tech, that is critical."
From Bergeron's perspective, what GTCR brings to the table is "smart money."
"We want to be in a position to do billion-dollar deals, and typically, that will require $3 million to $4 million in equity. GTCR is very experienced in financial technology, and they had the wisdom to back me for VeriFone in 2002."
Bergeron declines to identify specific technologies he would like to acquire but says he is on the lookout for technology assets that banks have undermanaged and are now actively shedding.
"I love carve-outs," Bergeron says. "VeriFone was an HP carve-out. When you take a company out of a large organization, like taking VeriFone out of HP, something magical happens. People are accountable; they're proud to work for a midsize company; they write code on weekends; they make their sales quotas; they work late; and they dream about an IPO."