Vantiv’s purchase of Worldpay, a British-based firm, is but the latest chapter for one of Durango’s largest employers, which started life as a spunky startup in the electronic payment industry, Mercury Payment Systems, that quickly migrated to Durango from Brewster, New York.
Mercury Payment Systems was born in 2001, the brainchild of Jeff and Marc Katz.
Jeff’s older brother, Marc, had sold a high-tech company in Seattle and moved to Durango in 1992 to escape the rainy Northwest. Marc Katz then started Durango Computer Classroom, a business that trained computer users on certain programs.
Durango Computer Classroom stagnated in the tech bust, and Marc Katz looked for new opportunities.
‘An idea kind of guy’Mercury was born of a business proposal from brother Jeff.
In 2010, Marc Katz told The Durango Herald, “Jeff’s an idea kind of guy. He’s always coming up with ideas. For 20 years, he had been telling me his ideas, and usually, I didn’t like them. This was a good idea.”
Mercury Payment Systems’ initial Durango office was in the Bodo Industrial Park, the home of struggling Durango Computer Classroom. Marc Katz used his computer knowledge to build the technological infrastructure, while Jeff used his industry experience to sell Mercury products and services – combining point-of-sales transactions to electronic payments – to merchants.
The Katz brothers hired Kaye Woodcock as Mercury’s first employee. She started on May 28, 2002, after answering a classified ad for a part-time position.
“We were tied to the office pretty much,” Woodcock said in 2010. “We had to be. It was only the three of us, we had no choice. If we wanted to keep it going, that’s what we had to do.”
By 2009, the company processed nearly $11.9 billion in credit card transactions and employed 360 workers in Durango and Denver.
After a growth spurt in April 2010, 60 percent of Mercury Payment Systems was purchased by Silver Lake, a private equity firm focused on technology start-ups. Silver Lake’s holdings include Ameritrade, Travelocity and Skype.
The Katz brothers remained as major shareholders and board members at Mercury.
Vantiv purchases MercuryThen in May 2014, Mercury Payment Systems was purchased by Vantiv Inc. for $1.65 billion. At the time, the company employed 400 in Durango and more than 200 in Denver.
Mercury announced it would suspend the initial public offering that it had been advancing for 2014. Mercury’s management team, including CEO Matt Taylor, and locations in Colorado remained in place.
The 2014 deal combined Vantiv, then the third-largest merchant-payment services company, with Mercury, the 11th-largest.
Both companies specialize in high-tech payment processing of debit, credit and gift-card transactions.
Vantiv was spun off from Fifth Third Processing Solutions in June 2011 and went public in March 2012. The company had net revenue of $2.1 billion in 2013.
Taylor was typical of the firm’s reliance on finding talent in Durango and the Four Corners. He had risen to lead Mercury’s day-to-day management after managing local restaurants East By Southwest and The Palace.
Taylor was Mercury’s eighth employee, hired in October 2003. He served as chief operating officer under co-founder Marc Katz before being elevated to CEO in May 2009.
Recently, Taylor was among Vantiv executives who rang the closing bell on the New York Stock Exchange, the culmination of Vantiv’s $11 billion acquisition of London-based Worldpay Group.
And what was once scrappy little Mercury, then Vantiv, will now take on the name Worldpay Inc. It will trade on the NYSE under the ticker symbol “WP.”
Global outreachTaylor said the acquisition offers Durango’s employees opportunities to take a product developed and refined here in Durango to electronic-payment systems worldwide and to work closely with Worldpay’s international headquarters in London.
The combined Worldpay processes more than 40 billion transactions a year in 146 countries. Vantiv had already been the U.S.’s largest merchant acquirer, a processor of credit, debit and gift-card transactions, and PIN debit acquirer, processing 25 billion transactions and almost $1 trillion in sales volume annually.
The combined companies would have ranked 287th on the 2017 Fortune 500 list had the merger been completed then. Vantiv generated revenue of $3.6 billion in 2016, while Worldpay’s revenue totaled $6.3 billion when converted from British pounds to dollars at the current rate.
“This acquisition is like all the others – it is focused on growth,” Taylor said. “The idea is to take what we do in Durango and expand it globally,” he said.