Iron Triangle Vaults Acquiring Ranks with Deal to Buy BA ISO Unit

Iron Triangle Payment Systems LLC, a 3-year-old Louisville, Ky.-based processor that has been steadily pursuing plans to build an acquiring business by buying independent sales organizations, on Friday announced it is taking over the ISO business belonging to BA Merchant Services Inc. for an undisclosed sum. By adding the business, which supports some 140,000 merchant locations and accounts for 3% of BA's annual transaction volume, Iron Triangle will become the sixth largest U.S. merchant processor, with a base of 260,000 merchant locations, the company said in a release. Closing of the sale depends on regulatory approvals. Backed by private-equity firm GTCR Golder Rauner LLC, Iron Triangle has now bought its second ISO, having acquired 20-year-old Retriever Payment Systems early in 2005. The combined business, the company says, will now support more than 700 ISO offices and more than 650 community banks. “Through this acquisition, we are combining two of the most prestigious brands in the payments space,” said Thomas A. Wimsett, president and chief executive at Iron Triangle, in a statement. “With the support of GTCR, we have clearly established ourselves as one of the nation's leading providers of payment processing services.” Executives with Iron Triangle and BA Merchant Services, also based in Louisville, were not immediately available for comment. Wimsett ran National Processing Co., the processor Bank of America Corp. acquired in 2004 to form BA Merchant Services, from 1999 to 2002. Mark Pyke, BA Merchant Services executive, said in a statement that the company sees more potential in direct sales to establishments served by the parent bank than in indirect marketing efforts via ISOs. “An independent sales channel doesn't lend itself to cross-selling opportunities and integration with other lines of business as our own sales channels do,” he said. Along with the ISO business and its merchant contracts, the deal also includes the NPC brand name as well as Best Payment Solutions Inc., a subsidiary of BA Merchant Services that serves 20,000 merchants from offices in Chicago and Tampa, Fla. The ISO business has been headed by Randy Sagar, senior vice president of indirect sales, who together with most of the 94 personnel in the unit will be joining Iron Triangle. BA Merchant Services, which serves 1 million merchant locations, controls 18% of the U.S. bank card acquiring market, measured by transaction volume, second only to the 51% share claimed by First Data Corp. and its alliances and ownership stakes, according to researcher TowerGroup. Based on that share, the company processes some 8.2 billion transactions annually. At 3%, Iron Triangle will be taking over volume of almost 250 million annual transactions.