Capital One agrees to acquire BlueTarp Financial

Capital One Financial Corp., the major banking and financial services company, has signed a definitive agreement to acquire Portland-based BlueTarp Financial for an undisclosed price.

BlueTarp, which provides business-to-business credit management services, was founded in 1998 by Brian Rigney as part of a project for his MBA while he worked as a financial analyst at Fleet Bank (Rigney is now CEO of Portland-based software company, Casco Development). BlueTarp’s focus for the first 15 years of its existence was providing credit management services to the building-supply industry, but a few years ago leveraged its expertise to expand into other vertical. Staples is currently ones of its largest customers, according to CEO Scott Simpson.

BlueTarp currently has more than 165 employees and occupies the top two floors of One Monument Square in Portland. It has roughly 1,000 merchant clients and more than 200,000 end customers (i.e., other businesses that do business with BlueTarp clients, like Staples), according to Simpson. Though a private company, BlueTarp revealed revenue of $17.6 million in 2015 when it landed on the Inc. 5,000 list. Simpson would not share a more current revenue figure, but said the company’s revenue is “significantly larger than the last quoted number.”

Terms of the transaction were not disclosed. The transaction is expected to close in the third quarter of 2019, subject to customary closing conditions.

“As an emerging leader in the business-to-business credit management industry, we were eager to identify a like-minded partner who could help us transform this sector on a much larger scale,” Simpson said in a statement. “We look forward to leveraging our fully developed trade credit technology platform and delivering significant value to Capital One’s existing and future partners.”

Capital One, which has more than $370 billion in assets, said in the announcement that BlueTarp’s services will enhance the financial offerings for its co-branded and private-label credit card partnership clients.

“BlueTarp offers a unified purchase-to-payment system and fosters strong banking relationships with large merchants and small- to medium-sized businesses alike,” said Buck Stinson, senior vice president of Card Partnerships at Capital One. “We are looking forward to integrating BlueTarp and its innovative technology and services into Capital One’s card partnerships business, enhancing our service capabilities for existing and future partners.”

Local impact

BlueTarp will remain headquartered in Portland, according to the announcement.

Shawn Cunningham, BlueTarp’s president and chief operating officer, told Maine Startups Insider that, assuming the transaction closes, all BlueTarp employees would be offered positions at Capital One. He said both he and Simpson will also remain with Capital One post-acquisition.

The company is also continuing to hire.

“We‘re always on the lookout for talent and anyone who really has a desire to join a growing company and contribute on a high level,” Simpson said, but couldn’t offer specifics on how big the local headcount may grow after the acquisition. “We are intending to grow our footprint in Portland is the most important part of the message.”

Simpson and Cunningham both have worked at Capital One earlier in their careers.

“Part of what makes us excited is Shawn and I both know what a great company it is in every respect and how much it invests in its associates,” Simpson told MSI. “It’s a great place to work and that will make it easier to be able to maintain and grow our footprint in Maine—and I can say that with first-hand knowledge, which as you can imagine makes this transition a lot simpler.”

The BlueTarp acquisition adds to the growing list of successful exits by Maine-based companies in recent years, including Pika Energy, CashStar, Certify, Putney, and Kepware Technologies.

Maine Venture Fund was one of BlueTarp’s earliest investors, first investing in the company in 2003 alongside Coastal Ventures II and “the legendary” Kip Moore, according to John Burns, the fund’s managing director. It has participated in multiple rounds since to support the company’s growth and development, with the latest investment in 2013. Total investment by Maine Venture Fund is over half a million.

”We are very pleased to have been an original and long time supporter of this now large, impactful Maine company, and look forward to Blue Tarp continuing, as part of the Capital One family, to Maine’s economic prosperity,” Burns said.