Purepay acquires remittance software firm Creditron
Purepay, a $100 million buyout fund focused on payments, banking and the financial supply chain, announced today that it has acquired Creditron, a Toronto-based remittance software provider focused primarily on middle market commercial customers in the U.S. and Canada.
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Creditron's existing management team will continue to direct the company on a day-to-day basis.
"With the recent evolution in the category, we believe remittance solutions enabling small-to-medium enterprises is a highly fragmented space with greenfield growth opportunities." said Steve Valachovic, Director of Purepay. "Already serving more than two hundred customers and led by experienced industry veterans, Creditron typifies the investment characteristics we look for."
With strong capabilities in Check 21 and Remote Deposit Capture, Creditron has been providing automated lockbox and remittance solutions to small and medium sized companies for 12 years. Regulations like Check 21 and BOC have created new and greater demand for these services. Creditron intends to capitalize on this increased demand by leveraging its operational experience in the sector and tapping Purepay's capital resources to extend the company's capabilities into new and broader markets.
"Check 21 and BOC provide real incentives for SME's to consider in-sourcing their lockbox," said Bob Meara, a senior analyst with Celent Communications' Banking Group. "In addition, over five million capture points in SME still process manually. The truncation of checks now allows for automation of payments in smaller unit volume environments."
Carol Coye Benson, a partner at Glenbrook Partners commented "Not only does Creditron have a very solid core remittance application, but its ROI product's cash application functionality and integration with Microsoft Great Plains hits the sweet spot for the small to medium enterprise."
"We entertained several potential investors and in the end we chose Purepay based on their understanding of remittance and a shared vision of Creditron's future," said Wally Vogel, President of Creditron. "Purepay is not only a financial sponsor. We're looking to leverage their network and resources to enhance the future growth of Creditron."
Purepay anticipates a consolidation among companies serving this market and expects future opportunities in the remittance and lockbox services over the coming quarters.
"We will continue to be active in this space as we believe the growth potential is strong," continued Valachovic. "We believe that strategic investments in this category combined with our ability to extend business models and branch out into new markets will yield positive results."
The deal closed on August 1, 2007.