In 2008, as the subprime mortgage crisis began turning the Street’s brash dealmakers into a squeamish clan of risk-averse bankers, Tim Murphy, an associate at Credit Suisse, decided that it was time to try some slots. Lots of them.
“I took a gamble in the casino space—it was probably one of the best decisions that I have made in my career and one the best decisions that we have made as a family,” explains the finance leader, who accepted a director of finance position with Cadillac Jack, a fast-growing slot machine manufacturing company based in Georgia.Read More
At the time, Murphy’s wife (the couple had met at business school) was working for The Coca Cola Company in Atlanta, a factor that the finance executive says helped to hedge his bet.
“I had opportunities to join investment banks in Atlanta and other large organizations, but we made a conscious decision that given the fact that she had a job at a very large and stable company, I could take a gamble with mine,” says Murphy.
Also influencing Murphy’s decision was the understanding that he would be reporting directly to the CEO, a former investment banker whom Murphy characterizes as a “hard charger.”
Besides helping Cadillac Jack to navigate gaming’s unique compliance highway, Murphy focused on finding ways to grow the business and make it more profitable.
“In about 3 years, we got to the point where we were comfortable with the business and began looking for an exit,” recalls Murphy, who began initiating discussions with potential buyers and lending partners.
Ultimately, Cadillac Jack was sold to Canadian gaming company Amaya for $167 million.
“It was just great experience for me in leading up to becoming a CFO,” says Murphy, who would join Amaya as director of corporate development, where for roughly a year he scouted out new purchases and divestitures for the publicly held firm before entering the CFO office of Atlanta-based REPAY, a publicly traded payment processing company.
“I joined REPAY in January 2014 just after the firm had taken in its first institutional private equity capital—prior to that, it had used really just family and friends’ capital,” continues Murphy, who over the past 7 years has helped the firm to unlock both private and public investment capital as it uncovered new avenues for growth.
Among REPAY’s transaction milestones was the sale of a controlling interest in the company to Corsair Capital in 2016 and a subsequent public offering executed via a SPAC business combination.
“Corsair was able to get a lot of liquidity at the closing of the business combination with the SPAC, and they have since fully exited the business at a much higher stock price than what it was when they entered,” notes Murphy, who adds that to date REPAY has leveraged its access to the public markets to help execute five acquisitions, helping the firm to expand into a number of new verticals. –Jack Sweeney
CFOTL: Tell us about REPAY … what sets its offerings apart from those of its competitors?
Murphy: We’re an integrated payment processor with about 400 employees. We were founded in 2006, and we address some very large underserved markets—specifically, we facilitate loan repayments and we also facilitate business-to-business payments. We are really focused on card processing—accepting cards for the repayment of auto loans, for example, or mortgages. We also serve the credit union space. We’re also doing that in Canada. On the B2B side, more and more businesses want to move away from checks and paper invoices and go digital, and payments is a big part of that. We’re allowing businesses to accept credit cards from other businesses. We’re also now in the payables part of that world and allowing companies to pay their vendors using virtual cards. These are very underpenetrated spaces where everything is still predominantly checks.Read More
Sometimes the penetration of card payments can be less than 10% of what the payments were on card, so it’s a wide open space. We have about 15,000 customers today. In 2020, we processed about $15 billion, but the total addressable market opportunity across our target verticals is about $4.7 trillion. So, $15 billion is nice, but it’s just a small fraction of a $4.7 trillion opportunity. We’ve very intentionally chosen these large, growing, underserved markets where we think that our payment technology really fills a void and our solution fits really well.
We also go to market in an integrated way with the software providers in these verticals, and this provides for a more seamless transaction. We think that this also helps with retention. It’s an integrated payment model, and we’re excited to continue growing. We have both organic growth and an acquisition pipeline, as well as a strong balance sheet.
REPAY is in a very good position today, a great spot. We just raised capital in January. Our priorities are to continue to focus on organically growing our business in the verticals that we serve and then to deploy the capital through M&A. We want to use our balance sheet to facilitate M&A to continue to grow the business and at the same time add to the organic growth story that we’ve built over the past few years. Focusing on organic growth and then utilizing our very strong balance sheet and M&A should set us up really nicely over the next 12 months.
QUOTE: “We’ve very intentionally chosen these large, growing, underserved markets where we think that our payment technology really fills a void and our solution fits really well.”
REPAY | www.repay.com | Atlanta, GA