The Keycorp journey
Keycorp, Australia’s leading provider of payment terminal services, was publicly listed but a fallen star when The Growth Fund invested, having lost over 90% of its market capitalisation through failed manufacturing ventures. The Growth Fund believed that Joe Bonin and his industry leading team would be better able to deliver the company’s intrinsic value under private ownership.
Confident that the board and shareholders would endorse an offer, The Growth Fund moved quickly to acquire an option over 19% of the company and took the business private in December 2010 through a scheme of arrangement.
Operational excellence pays off
With a capable management team at the reins, Keycorp’s growth came through winning new blue-chip banking and retail customers and by increasing the breadth of the outsourced services offering provided to existing customers. Over time, Keycorp was able to become the trusted payments partner for several key accounts, replacing their in-house payment terminal capability.
The business was strategically positioned to international entrants by developing partnerships with international payments hardware and software manufacturers to create a platform for payments product distribution.
In May 2014, Keycorp was sold to Bambora, a Nordic Capital portfolio company, as part of a global roll-up in the payment technology space. Bambora saw Keycorp’s strong market position and network of customers and merchants as an attractive platform to distribute other products and services into Australia and eventually Asia.
Investors received a 4.9x return on the exit, with the Keycorp management team achieving a 13x return on their investment. The Keycorp management team elected to reinvest alongside their new partners and to continue their journey – driving the next phase of the business’s expansion into Asia.