Palamon sells Retail Decisions for $205m

Ellie Pullen
21 July 2014

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Palamon Capital Partners has sold UK fraud prevention software developer Retail Decisions to US payment systems firm ACI Worldwide for $205m.

The sale generated a return of 2.5x total investment. The all-cash transaction is expected to close in the third quarter of this year.

Palamon acquired Retail Decisions in December 2006 as part of an investor consortium that took the business private from the London Stock Exchange.

Palamon acquired the business with AlpInvest Partners and Morgan Stanley Alternative Investment Partners; the three firms bought the asset for £200m. Palamon took an 83% stake, according to unquote" data, via its €670m Palamon European Equity II fund.

The deal was supported by a senior debt package from National Australia Bank and Royal Bank of Scotland, with the latter also underwriting an unwarranted mezzanine facility.

During its time as owner, Palamon stated it had fully de-leveraged the business and returned 80% of invested equity through the sale of three of Retail Decisions' divisions. The firm sold its UK fuel cards business in August 2009 to FleetCor Technologies; its Australian businesses in September 2010 for €243m; and the European fuel card division in March 2011.

At the time of Palamon's acquisition in 2006, Retail Decisions generated £150m in turnover and employed around 500 staff.

ACI expects Retail Decisions to generate around $18m in revenues and an adjusted EBITDA of $4m for the remainder of 2014, should the transaction be closed in Q3.

Company
Founded in 2000 – the same year it also listed on the LSE – Retail Decisions is headquartered in Brookwood, Surrey, with additional offices in Cape Town, Beijing, Sydney, Singapore, Buenos Aires, São Paulo, New Jersey and Rhode Island.

Retail Decisions is a developer of fraud prevention software-as-a-service (SaaS), such as its ReD Shield product, which is a real-time, online fraud prevention service for the global e-commerce industry.

People
Paul Stanley is the CEO of Retail Decisions. Fabio Massimo Giuseppetti is a partner at Palamon.

Advisers
Vendor – William Blair & Company (Corporate finance); Slaughter & May (Legal).
Company – William Blair & Company (Corporate finance).
Acquirer – Bank of America Merrill Lynch (Corporate finance).