Fortitude Partners Acquisition of Conix

Background

Fortitude Partners is a leading growth-focused investment firm, which was seeking to make add-on acquisitions in banking software for its platform portfolio companies, MC Software, and CV Systems. CV Systems has been a leader in the financial services software industry providing automated teller machine (ATM) software, online transaction processing, financial settlement, fraud detection, cybersecurity, and other technologies.

Objective

CV Systems (the platform portfolio company) wanted to pursue complementary acquisitions as it wanted to expand its products and solutions suite for its financial institution clients. The company wanted to combine its legacy mainframe products with innovative technologies across its distribution footprint to better serve its financial clients and improve their strategic initiatives such as real time integrated payments, fraud detection, cyber security software, and item processing solutions.

Transaction Process

HRC ran a proper buy-side search canvassing the market for any domestic banking software companies with the appropriately revenue profiles and advised on the transaction. Fortitude Partners was seeking to acquire software companies at value pricing, which in today’s market requires a proactive and aggressive search effort to identify. As such, HRC maintained an extra thorough search process to identify the right fit at the right valuation, as software multiples have been through the roof. HRC ran the process for a year, meticulously researching and proactively reaching out to a large acquisition universe of companies. After HRC performed initial financial and operational assessments of the opportunities, Fortitude Partners issued some term sheets before signing the one with Conix Systems.

Outcome

Conix Systems was acquired by CV Systems. The acquisition helped CV systems to expand its product offerings and enable it to deliver products across a variety of delivery channels for clients based on their specific needs.