Sale to NCR Is a Quick, Profitable Flip for a Private Equity Firm

It was only in August that Thoma Bravo, the private equity firm, completed its acquisition of Digital Insight, a company that processes payments for financial institutions. The seller was Intuit, the financial software company, and the price was $1.025 billion.

On Monday, just 124 days after completing the deal and boasting about the longterm potential for growth at Digital Insight, Thoma Bravo turned around and sold the company. The buyer is NCR, one of Intuit’s main rivals, and the price is $1.65 billion.

The quick turnaround marks a big win for Thoma Bravo. By flipping the company for more than a half billion dollars in less than half a year, the company looks like an incredibly savvy buyer and seller. Given the price differential and the timing of the two deals, it appears that Thoma Bravo added $5 million to the value of the company during each day of its ownership.

The deal also raises sticky questions about why NCR wound up paying such a premium just four months after Digital Insight changed hands. As Dan Primack wondered, “So would Intuit just not sell the unit to NCR, or did NCR drop the ball?

It’s unclear whether Thoma Bravo always intended to sell Digital Insight so quickly. When the deal closed in August, Orlando Bravo, a managing partner at the firm, said:

“We look forward to working with the Digital Insight management team to . . . grow the business organically and through strategic acquisitions. As a stand-alone company, Digital Insight will be able to focus on providing an innovative digital banking platform and aggressively expand its customer base.”

On Monday, Mr. Bravo gave no indication of whether a quick sale was the plan all along, instead content to rest on one of the greatest quick flips in recent memory.

“Thoma Bravo was able to establish Digital Insight as a standalone company following our acquisition from Intuit in August, while also offering Intuit a successful and efficient outcome,” he said in a statement. “Digital Insight has attracted interest from NCR with its strong set of online and mobile banking products, rich client list, and accomplished employees.”

Thoma Bravo declined to comment further on Monday.