Merchant Data Systems Inc., a Miami Beach, Fla.-based independent sales organization, has bought ISO Merchant Services, an ISO with 1,300 merchants, Merchant Data Systems announced this week. Terms were not disclosed.
Drew Freeman, Merchant Data Systems president, tells PaymentsSource the two co-founders of Delray Beach, Fla-based ISO Merchant Services, Harvey Loewenstein and Jay Wertheim, are staying with the company.
“We bought the sales engine,” Freeman says, referring to the sales force and its structure of agents. Loewenstein and Wertheim have “done a great job recruiting [sales] agents.”
Merchant Data Systems’ model provides owners of acquired companies the option to stay with the company, but it assumes at least a 51% ownership stake in the acquisition, Freeman says.
“Primarily we like partners that have relationships with agents and still want to work at [merchant sales],” Freeman says. “They don’t want to get out.”
Sellers also have the option to receive cash for their ownership share at the time of sale, or they may opt to receive compensation later, when their shares might be worth more, he says.
“We let them choose how much money they may take up front or on the back end,” Freeman says.
Other acquisitions are possible, Freeman says. “We’re looking at about eight possibilities now; maybe three we would pursue,” he says.
