NEW YORK, NY (August 11, 2008) – Lightyear Capital LLC (“Lightyear”), a private equity firm that focuses on financial services, today announced that Lightyear Fund II, L.P. has signed a definitive agreement to make a significant investment in Higher One Holdings, Inc. (“Higher One” or the “Company”), a technology-driven financial services company serving higher education. Lightyear’s investment in Higher One is part of a leveraged recapitalization through which the Company will repurchase shares from existing investors. Lightyear will become Higher One’s largest shareholder with a significant minority stake.
Higher One provides electronic financial disbursement and payment solutions for universities and their students that save the time and expense associated with handling financial aid refunds, on-campus and community purchases, payment collections, and more. The Company also offers a suite of online banking and debit card services to university students. Founded in 2000 by three Yale students, Higher One today serves roughly 185 schools with 1.5 million students. Growing demand for Higher One’s solutions resulted in the Company’s being ranked 85th on the 2007 Inc. list of the 500 fastest growing private companies in America.
“Higher One provides Lightyear with a strategic investment opportunity in a high-growth area of the payments processing industry,” said Donald B. Marron, Chairman and Chief Executive Officer of Lightyear. “Higher One represents a classic Lightyear investment: we have identified a strong, talented management team running a unique technology-focused business that is supported by long-term growth trends, including the continuing shift toward electronic payments and the use of debit cards.”
Mark F. Vassallo, Managing Director of Lightyear, added, “Lightyear has been targeting investments in the payments sector as part of our strategy of identifying niche growth companies where technology is integral to the delivery of innovative financial products and services. With our history of investing in higher education and financial technology, our investment in Higher One is a perfect fit with this strategy.”
Stewart Gross, Managing Director of Lightyear, who will join Higher One’s board in connection with the transaction, added, “Higher One has developed a distinctive, proven business model with visible, stable, and predictable revenue streams. Higher One’s scalable operating platform will produce increasing profit margins as the business grows. We have tremendous confidence in the Higher One management team and look forward to supporting them as we partner with the Company to achieve its next phase of growth.”
“Lightyear is an ideal investment partner for Higher One,” said Dean Hatton, Chief Executive Officer of Higher One. “We knew we needed to provide some of our early shareholders an exit strategy, and we wanted to secure a strong capital partner to support the enormous growth of our business. Lightyear’s strategic management capabilities and knowledge of both the higher education industry and the financial technology sector will be invaluable in building Higher One into an even more impactful player in serving universities and their students.”
Lightyear’s legal counsel was Simpson Thacher & Bartlett LLP. Higher One’s financial advisor was Banc of America Securities LLC, with legal counsel from Wiggin and Dana LLP.
ABOUT HIGHER ONE
Founded in 2000, Higher One provides higher education institutions and their students with efficient, convenient and easy-to-use solutions to handle financial disbursements. These include: student refunds, on-campus and community purchases, payroll and employee expenses, as well as the collection of payments from students, parents, and sponsors.
Higher One offers a suite of online banking services including the OneAccount, an FDIC-insured checking account, and OneCard, a Debit MasterCard®. To date, Higher One has disbursed over $4 billion in refunds for its clients to more than 2 million students, faculty, and staff at distinguished public and private higher education institutions throughout the country.
Higher One recently ranked 85 on the 2007 Inc. List of the 500 Fastest Growing Companies in the United States. Higher One is based in New Haven, Connecticut. For more information, please visit www.higherone.com.
ABOUT LIGHTYEAR CAPITAL
Lightyear is a private equity investment firm providing buyout and growth capital to companies in the financial services industry. Based in New York, Lightyear, through its affiliated funds, has managed approximately $3 billion of committed capital with investments across the financial services spectrum, including asset management, banking, brokerage, financial technology, insurance, leasing, related business services, and other sectors within financial services. Lightyear brings unique strengths and discipline to its investment process, as well as operating, transaction, and strategic management experience, along with significant contacts and resources beyond capital. The senior team of professionals each has approximately 25 years of financial services-related experience and includes Chris Casciato, David Cynn, David Glenn, Stewart Gross, Thierry Ho, Donald Marron, Richard Sterne, and Mark Vassallo.
For more information, please visit www.lycap.com.
For Higher One:
Melissa Kanter/Kelly Rohrs