Forefront Communications

Buyouts Insider: GTCR to Exit ConvergEx with Dash Sale

LiquidityBook

Mark Dowd

Mark Dowd

With the sale of Dash Financial Technologies, GTCR will exit ConvergEx after more than 11 years.

Dash said March 7 that Flexpoint Ford was buying the company from GTCR. Terms weren’t disclosed.

Peter Maragos and David Karat, Dash’s co?founders, are investing in the deal. Maragos is also continuing as Dash’s CEO. The transaction is expected to close in Q2.

Dash, with offices in New York and Chicago, provides asset trading technology and execution services. GTCR acquired a majority of the company last year when it merged LiquidPoint, part of ConvergEx, with Dash. The merged company was the last chunk of ConvergEx still owned by GTCR.

The Chicago buyout shop will likely realize $200 million to $250 million from the Dash sale, one banker said.

While its Dash ownership was brief, GTCR’s investment in ConvergEx dates to October 2006. GTCR, at that time, simultaneously acquired Eze Castle Software and BNY Mellon’s institutional businesses to form ConvergEx. The deal, valued at $1 billion, saw BONY and other shareholders retain stakes.

Which fund GTCR used to invest in ConvergEx is unclear. The firm’s ninth flagship fund closed on $2.75 billion in 2006, PitchBook said. GTCR recently raised its 12th PE fund at $5.25 billion.

ConvergEx bought LiquidPoint, an equity options executive and trading technology firm, in 2007 for $200 million, Buyouts said.

GTCR, a veteran fintech investor, has tried to exit ConvergEx before. In 2011, the Chicago buyout shop pursued a dual process, both a sale and IPO, for ConvergEx. Neither worked out.

Instead, in 2013, ConvergEx sold Eze Castle Software and RealTick businesses to TPG. That transaction was valued at $1.9 billion.

Cowen Group last year picked up ConvergEx’s equities business for $100 million. BNY Mellon fully exited ConvergEx with the sale to Cowen in 2017, a spokeswoman said. GTCR in 2017 also merged LiquidPoint with Dash, which resulted in the Chicago buyout shop owning a majority of Dash Financial.

The sale to Flexpoint is a friendly deal. Don Edwards founded Flexpoint, which has offices in Chicago and New York, in 2005. Edwards is a former GTCR executive and led the firm’s healthcare effort before launching Flexpoint. Neither GTCR nor Flexpoint used a banker in the Dash transaction, the person said.

“We had an opportunity that emerged with some folks we knew very well and we pursued. We think it’s great for the company and Flexpoint,” said Collin Roche, a GTCR managing director.

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