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Insight Partners joins Francisco Partners as NMI investor -sources

·2 min read

By David French

NEW YORK, Sept 9 (Reuters) - Private equity firm Insight Partners has agreed to acquire about a 40% stake in NMI, a payments platform owned by buyout firms including Francisco Partners, according to people familiar with the matter.

The deal values NMI at around $1.55 billion, including debt, and will reduce Francisco Partners' stake in the company to around 40%, the sources said. Insight Partners and Francisco Partners will share control of the company, the sources added.

Another existing investor in NMI, buyout firm Great Hill Partners, and the company's management will own the remaining equity.

The sources requested anonymity ahead of an official announcement expected as early as Thursday.

NMI processes more than $150 billion of payments annually, in-store and digitally, for over 250,000 merchants. Valuations for such companies have soared as more people carry out transactions online during the COVID-19 pandemic.

The deal values NMI at more than four times what the Schaumburg, Illinois-headquartered company was worth when Francisco Partners invested in it in 2017, one of the sources said.

It adds to a streak of lucrative investments for Francisco Partners. The firm recorded a return of more than two times its original investment when Paysafe Ltd, an online payments company it invested in, merged with a blank-check acquisition firm earlier this year at a valuation of around $9 billion.

In July, Francisco Partners agreed to sell video streaming provider LiveU to buyout firm Carlyle Group Inc, a deal in which it stands to make five times its original investment, while in June it took online legal services purveyor LegalZoom.com Inc public in a $535.4 million IPO, which valued the business at six times its initial outlay.

Insight Partners has made a number of investments in the payments sector in companies such as PayIt, which processes payments for U.S. state and local governments, and Africa-focused Flutterwave. It is also an investor in Checkout.com, one of Europe's most valuable financial technology companies. (Reporting by David French in New York; Editing by Leslie Adler)