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WatersTechnology: GTCR Agrees to Sale of Dash Financial

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Mark Dowd

Mark Dowd

Dash Financial Technologies co-founders Peter Maragos and David Karat, with the backing of private-equity firm Flexpoint Ford, have acquired the company from private equity firm GTCR in a management-led buyout.

Maragos will remain as CEO and Karat will stay in his current role as chief creative officer. Flexpoint managing director Steven Begleiter will serve as the company’s non-executive chairman and will be joined on the board by Daniel Edelman, principal of Flexpoint. Financial terms of the deal were not disclosed.

“David and I believe very strongly in the business and team we have here,” Maragos tells WatersTechnology. “I’m 41, David’s 45, and we’re both very passionate about what we’re doing, so ultimately this was about partnering with a financial sponsor who not only shares our passion for the business, but also has a long-term time horizon that matches ours.”

Dash Financial’s road to this point is a bit of a winding one. The company was launched in 2011 as a trading technology and execution services provider. In January 2017, GTCR, the then-owner of Convergex, lifted LiquidPoint out of Convergex to merge it into Dash, launching a new firm called Dash Financial Technologies, with GTCR serving as the majority owner of the new company. The deal closed in March of 2017.

One month later, Cowen Inc. agreed to buy Convergex Group from GTCR for $116 million, a deal that would close in June of that year. Dash remained under GTCR’s umbrella.

GTCR had first invested in what was then BNY ConvergEx back in 2006 and BNY ConvergEx bought LiquidPoint in 2007.

This is a key point, says a source familiar with the situation: By selling Dash, GTCR is closing an investment that started 12 years ago. If today’s deal had not been done, says the source, GTCR would “likely have been looking for an exit relatively soon.” The source added the deal was “largely about finding a new partner whose time horizon matched Dash management’s.”

Additionally, notes the source, “this allows them to be acquisitive given all the potential deals that are now on the table.” To that point, in announcing the deal, Flexpoint’s Edelman hinted at further acquisitions for Dash going forward.

“We have known the Dash management team for some time and look forward to helping them to build upon the firm’s significant success to date by both accelerating current organic growth and by pursuing potential adjacent acquisitions, similar to the highly successful LiquidPoint transaction,” he said in a statement.

While Maragos declined to comment on GTCR’s thinking as to why they decided to sell Dash, he said that the private equity firm was integral in making the LiquidPoint merger happen.

“GTCR was a great partner who made last year’s integration with LiquidPoint possible, and we are incredibly grateful for the contributions and support we received from them,” he says. “This deal is a win for everyone, including our clients given what this will allow us to do in terms of further building out our platform.” GTCR declined to comment.

The deal is expected to close in the second quarter of 2018.

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