Verafin’s C$515 million equity and debt recapitalization

Houlihan Lokey served as the financial advisor to Verafin. Choate represented Spectrum Equity

Verafin, the world’s largest financial crime management software company, completed a C$515 million equity and debt recapitalization.

Verafin has enjoyed tremendous growth in recent years, and its long-term vision of fighting financial crime through collaboration and cross-institutional analysis is fast becoming the industry standard for fraud detection and anti-money laundering (AML) regulatory compliance.

The recapitalization allows Verafin to aggressively pursue its growth plans while remaining an independent company.

New equity financing was provided by Spectrum Equity’s current investing fund and Information Venture Partners’ (IVP) new fund with participation by new backers Northleaf Capital Partners, BDC Capital and Teralys Capital. Senior debt financing for the transaction was led by Wells Fargo Capital Finance and included Scotiabank in the syndicate.

Following the transaction, Verafin co-founders, management and employees will collectively represent the largest shareholding group. A prior IVP fund provided initial venture capital financing for Verafin in 2009, and a prior Spectrum Equity fund led a substantial growth equity financing in 2014.

Verafin provides a cloud-based, secure software platform for Fraud Detection and Management, BSA/AML Compliance and Management, High-Risk Customer Management and Information Sharing. Nearly 3,000 banks and credit unions use Verafin to effectively fight financial crime and comply with regulations. Leveraging its unique big data intelligence, visual storytelling and collaborative investigation capabilities, Verafin significantly reduces false positive alerts, delivers context-rich insights and streamlines the daunting BSA/AML compliance processes that financial institutions face today.

Choate advised Spectrum Equity with a team including Brian P. Lenihan (Picture), Rebecca A. Wilsker, Louis J. Marett and John Marshall Chambers.

Involved fees earner: Brian Lenihan – Choate; Louis Marett – Choate; John Marshall Chambers – Choate; Rebecca Wilsker – Choate;

Law Firms: Choate;

Clients: Spectrum Equity Investors LP;

Author: Ambrogio Visconti