Tobin & Company Investment Banking Group acted as strategic merger and acquisition advisor to Cass Information Systems, Inc. in its search for acquisition candidates in the outsourced financial exchange, business intelligence and data processing services spaces.
Cass is one of the largest, most reliable and flexible processing services Firms, specializing in payments and data.
Tobin assisted Cass in making itself known to over 350 companies in over 60 different verticals, ranging from Audit Recovery to Warranty Processing.
Active discussions were pursued with 23 target companies and a handful of offers were made by the client.
DETAILED CASE STUDY:
St. Louis-based Cass Information Systems, Inc. (NASDAQ: CASS) is the nation’s leading provider of transportation, energy and telecom invoice payment, expense management and information services. The company holds the core competencies of data acquisition, data management, business intelligence and financial exchange. The company also owns Cass Commercial Bank as a wholly owned subsidiary, allowing it to hold a significant competitive advantage in payments for its customers.
Cass wanted to extend its services portfolio, grow its revenue base and expand and solidify its customer list through acquisitions. The company for many years tried to find companies to acquire on its own, but without success. The public company could not interest its normal stable of middle market investment banks to help with the process, since the acquisitions that it sought were too small for these institutions.
SOLUTION:
Cass Information Systems received a call from Justine Tobin on a project that TOBIN was working on for another client. Mark Murray, Senior Vice President of Cass, said, “TOBIN did a sell-side offering in the Telecom Expense Management sector and Cass was impressed by their practical experience. Cass is in a similar niche and needed expertise in that sector. TOBIN’s sector experience was a definitive factor for engaging the investment bank.”
Cass Information Systems hired TOBIN to assist in its search for acquisition candidates. Cass was impressed with the firm’s follow-up and its understanding of the marketplace. Cass was attracted to the “boutique approach” and specialized attention that was given to the project. TSIBG offered a very hands-on style with consistent senior-level attention, which was a favorite aspect of the entire relationship for the client. Cass preferred a smaller firm’s dedication, rather than being “lost in the shuffle” at a larger bank. When asked if they felt as though they missed out on any aspect of the deal process by not going with a larger investment bank, Cass could not mention a single thing.
RESULTS:
Over the nearly two-year engagement, TOBIN uncovered 60 different industry verticals for Cass to invest in. TOBIN contacted over 350 companies and arranged meetings with over dozen different acquisition candidates. Cass received an through introduction and review of the entire marketplace thanks to Tobin & Company’s deep and intense work. Murray said, “The firm generated lots of ideas that allowed Cass Information Systems to continue down the road in sourcing companies to buy.”
Murray believed that for any investment bank, the goal is to get paid and to “do a deal.” With TOBIN, Cass never felt that the integrity of the transaction process was compromised just to get a deal done. Cass believed that TOBIN’s goal was to provide the best execution of the specific engagement that the client had agreed upon. The firm maintained throughout a solid understanding of where Cass’ interests were in the project. Cass never completed a transaction during TOBIN’s engagement, which Murray believes is a testament to the quality of the advisory services provided in the engagement
TOBIN’s ability in identifying market opportunities was a significant value-add for Cass. The firm properly identified and understood the unique target segments Cass was interested in. Although a deal was not completed, Cass felt that Tobin’s execution throughout the process was superb.
Cass claims that using a boutique investment bank, as opposed to a larger firm, was “definitely the right way to handle [the project]” The client felt that if it had gone with a big investment banking firm, it would have been shoved into a pre-packaged concept of what type of transaction was most convenient for the investment bank.
“Clearly we needed a lot of support with the engagement. We were not your run-of the mill bank holding company.
We were looking at very specialized issues. You all did quite a good job. TOBIN helped me to understand what was going on as a novice in the world of investment banking. The firm approached us in an easy-to-understand, down to earth fashion.”
– Mark Murray, Senior Vice President, Cass Information Systems, Inc.
