With three acquisitions in the past two months, Private Business Inc. is refocusing itself as a technology provider to community banks.
The strategy was set by the financial technology vendor's chief executive, Lynn Boggs, formerly the president and chief operating officer of the data processor InterCept Inc.
On Tuesday, PBiz, as the Brentwood, Tenn., company is known, bought Goldleaf Technologies Inc., a provider of automated clearing house and remote-deposit systems, for $16.8 million in cash and $350,000 in stock.
Goldleaf, also of Brentwood, had a client list of 2,500 financial institutions, correspondents, and clearing-house organizations in the United States and Latin America.
Also in January, PBiz bought the assets of the teller-automation software developer PTC Banking Systems Inc. of Bradenton, Fla., which had 80 financial customers in the United States.
And in mid-December, PBiz paid $6.9 million in cash and stock for Captiva Solutions LLC, an Atlanta core data and item processor that Mr. Boggs started in April 2005. He was Captiva's CEO and took the reins at PBiz under the deal.
Mr. Boggs said his goal is to meet "all the operational needs of community financial institutions." With the Goldleaf acquisition, he said, "we think we have a complete suite" of products.
PBiz was founded in 1990. Even before the Captiva deal it had a variety of financial offerings, including practice-management software for doctors (it is sold through banks) and inventory management services for retailers. Mr. Boggs said the financial services industry now generates 80% to 85% of its business.
Mr. Boggs said PBiz, which has revenue of $40 million, is well positioned to go after more acquisitions. It entered into a new $18 million credit agreement this month with Bank of America Corp.; a $7.1 million Bank of America credit facility was closed with the Captiva purchase.
And though its stock is publicly traded, PBiz's majority owner is the New York private equity firm Lightyear Capital LLC, which has $2 billion of assets under management.
Scott Meyerhoff, an executive vice president at PBiz, said that Lightyear has "no short-term plan to sell the entity. It's to grow." (A spokesman for Lightyear said executives were not available to discuss PBiz.)
Mr. Boggs has a history with PBiz. At one time he was the CEO of the payment processor Towne Services of Suwanee, Ga., which PBiz bought in August 2001.
He started Captiva after selling InterCept to Fidelity National Financial Inc. of Jacksonville, Fla., in November 2004. The sale capped a turbulent year for the Atlanta company, which was unsuccessful in a bid to go private, sued by shareholders, and pressured by shareholders to find a buyer.
Much of the tumult resulted from InterCept's efforts to enter online payment processing by buying Internet Billing Co. Ltd., a small outfit whose customers were primarily adult Web sites. Observers said that iBill, which was plagued by high chargeback rates, made InterCept unpalatable to investors and buyers, and InterCept sold iBill in March 2004.
PBiz will try to avoid the mistakes InterCept made. "Our philosophy is to stick to acquiring things that we know," said Mr. Meyerhoff, who had been InterCept's chief financial officer.
Mr. Boggs said that for now, PBiz will focus on cross-selling its new portfolio of products - there is little overlap among the customer lists of the different companies.
He is especially enthusiastic about the remote-capture system from Goldleaf, which will keep that name as a division of PBiz. Mr. Boggs said "a very small percentage" of the nation's 8,000 community banks "are out there giving their customers remote deposit."
Goldleaf has the backing of the Independent Community Bankers of America, which agreed in October to offer its remote-deposit services to ICBA members.
M. Arthur Gillis, the president of Computer Based Solutions Inc., a Dallas research and consulting firm, said he had been skeptical when Mr. Boggs started Captiva, since banking technology vendors have been consolidating for several years.
"I personally did not think Lynn's venture was promising, simply because it was too late to try and duplicate what Fiserv had achieved," Mr. Gillis said. "But I said the same thing about Fidelity."
Fiserv Inc. has become the largest banking technology company by making more than 135 acquisitions since its founding in 1984. Fidelity, which entered the industry in 2003 with its purchase of the financial processing unit of the telephone company Alltel Corp., has grown through acquisition to challenge Fiserv for the top spot.
PBiz probably will not have that type of growth, but having taken over Captiva, it "may be a force," Mr. Gillis said.
