Embedded Technology
The IMS portfolio is a high-quality cash flow asset worth 7–9× EBITDA today. That is a real outcome — and it is the ceiling as long as IMS sells as a processing portfolio. The question this proposal answers is how to get to 15–18× EBITDA instead, and who captures the difference.
A pure payment processing portfolio sells at 7–9× EBITDA. A payments-technology platform with proprietary software and embedded switching costs sells at 15–18× EBITDA. Strategic acquirers — Fiserv, Global Payments, Worldpay — are not buying cash flow. They can generate cash flow. What they pay a premium for is distribution and technology they cannot build faster than they can buy. The LAZ Parking portfolio, as currently structured, sells as the former. This proposal converts it into the latter.
The mechanism is a custom-built integration of the Jackrabbit Gateway into LAZ's payment, reporting, and reconciliation infrastructure across all locations. Once deployed at scale, the LAZ relationship is no longer a processing contract — it is operational infrastructure. The cost and disruption of replacing it is significant. That stickiness is what drives the multiple.
Jackrabbit Connect commits $25M–$35M in equity capital at close in exchange for an agreed ownership stake of (X)%. As part of the transaction, Jackrabbit assumes operational control of Integrity Merchant Services, establishing a new strategic partnership that combines IMS's merchant base and LAZ relationship with Jackrabbit's technology platform and M&A infrastructure. Existing minority partners will receive a full equity buyout at close.
The Jackrabbit Gateway Layer
We build a purpose-fitted version of the Jackrabbit Gateway designed specifically around LAZ's operational requirements — transaction processing, location-level reporting, corporate reconciliation, and client-facing payment interfaces.
This is not a generic integration. It is built to LAZ's workflow, branded to LAZ's standards, and scalable across every location in the portfolio. Every person in LAZ's finance and operations function works inside a system we built.
Why Switching Cost Is the Asset
- A payment processor can be re-papered in 90 days with minimal disruption
- A custom-integrated gateway embedded in daily operations and corporate reporting cannot be replaced without a significant change management exercise
- At scale across LAZ's full location footprint, that switching friction compounds to a near-prohibitive barrier
- This gives a strategic acquirer something they cannot easily replicate — a deployed vertical software layer in the parking segment with proven adoption
- That is what commands a software multiple
"Fiserv already processes payments at scale. What they acquire at a premium is distribution they cannot build faster than they can buy — a purpose-fitted technology layer deployed and adopted across a defined vertical. That is what this integration creates."
| Scenario | Asset Classification | Likely Buyer | EBITDA Multiple | Value Driver |
|---|---|---|---|---|
| Status QuoIMS standalone — processing portfolio | ISO / Payment Processor | PE or ISO acquirer | 7–9× | Annual net residual |
| Combined PlatformPayments + embedded vertical software | Payments Technology Platform | Fiserv / Global Payments / Strategic | 15–18× | EBITDA + software + LAZ switching costs + rollup scale |
Reference transactions: Fiserv / First Data (~14× EBITDA, 2019); Global Payments / TSYS (~16× EBITDA, 2019); Worldpay / Vantiv (~17× EBITDA, 2018). Premiums in each case driven by software distribution and switching costs — not residual multiples.
Existing Partners — At Close
- Liquidity event — partial monetization of current IMS equity value
- Retained equity stake in the combined platform
- Defined ongoing roles through the exit process
- Access to Jackrabbit's capital, technology, and M&A infrastructure
Existing Partners — At Exit
- Pro-rata participation in exit proceeds at the platform multiple
- Realization of the value created by the integration — not just the underlying cash flow
- Formal exit process run with all equity holders represented
- The second bite — on a significantly larger and more valuable asset
The partnership will include a mutually agreed integration milestone schedule with defined checkpoints at months 6, 12, and 24. These milestones serve as shared accountability benchmarks for both parties — not as punitive triggers. In the event of a material execution failure by either party, the agreement provides for a good-faith resolution process, with remedies negotiated and agreed in the definitive agreement. The structure is designed to keep both parties aligned on the outcome, not to create adversarial exit mechanics.
The equity stake, the valuation, and the operational structure are all subject to negotiation. What is not negotiable is the ceiling — and the difference between a 7–9× exit and a 15–18× exit on a $10M EBITDA business is the entire reason to have this conversation now rather than in four years.