LONG ISLAND CITY, NY, September 1, 2009 – Cynergy Data today announced that it has voluntarily initiated proceedings under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware and is pursuing a sale process under Section 363 of the Bankruptcy Code.
Cynergy Data has entered into an asset purchase agreement with “stalking horse” bidder Cynergy Holdings, LLC, an investment affiliate of The ComVest Group, a private investment firm focused on providing debt and equity solutions to middle market companies, to buy substantially all of the company’s assets for $81 million in consideration. ComVest is a leading provider of capital to the financial technology markets and owns controlling interests in a number of companies in the electronic payment processing industry, including Pipeline Data, CardAccept, AirCharge, SecurePay and Northern Merchant Services.
According to Marcelo Paladini, chief executive officer of Cynergy Data, the Chapter 11 process will allow the company to continue providing its merchant credit card processing services while the business completes a structured sale of the company’s assets. “We are grateful for the continuing support of our employees, vendors, merchants and independent sales organizations as we undertake our restructuring process. We expect to emerge from this process as a new company with a much stronger financial position focused on continuing to provide excellent, cost-effective solutions to our merchants and ISO partners,” he added.
ComVest also anticipates tremendous opportunities for Cynergy Data. “ComVest is excited to partner with Cynergy Data to help the company restructure debt and emerge as a leading acquirer. We believe that Cynergy has a significant competitive advantage in its processing business offering superior service and technology to its many merchants and ISO partners. As a firm that has a great deal of experience in payments processing, we are committed to Cynergy’s success in the future and look forward to partnering with Cynergy’s management team in serving the industry for many years to come,” said Pete Kight, Managing Partner, ComVest.
Cynergy Data has secured a commitment from its existing lenders for so-called Debtor-in-Possession (DIP) financing which it believes will provide ample liquidity to meet its ongoing obligations during the sale process.
The Company’s legal advisor is Nixon Peabody LLP; its financial and restructuring advisor is CM&D Management Services LLC; its industry expert is Unicorn Partners, LLC; and its investment bankers are Stifel, Nicolaus & Company and Peter J. Solomon Company.
Additional information on the restructuring is available on the Company’s website at http://www.cynergydata.com/restructuring.
About Cynergy Data
Launched in 1995, Cynergy Data is a merchant credit card processing service provider that gives business owners excellent customer support and unparalleled merchant services. The company emphasizes honest, service-oriented business practices and customer-friendly products and services. During the past 14 years, Cynergy Data has rapidly expanded from a two-person operation to one that employs over 130 service-oriented team members. Headquartered in New York City, Cynergy Data manages a portfolio of nearly 80,000 merchants processing in excess of $10 billion annually.
About The ComVest Group
The ComVest Group is a leading private investment firm focused on providing debt and equity solutions to middle-market companies with enterprise values of less than $350 million. Since 1988 ComVest has invested more than $2 billion of capital in over 200 public and private companies worldwide. Through its extensive financial resources and broad network of industry experts, ComVest offers its portfolio companies total financial sponsorship, critical strategic support, and business development assistance. ComVest additionally owns controlling interest in Pipeline Data, CardAccept, AirCharge, SecurePay and Northern Merchant Services; all credit card merchant servicing organizations.