Goldleaf acquires Springfield-based DataTrade LLC

Brentwood, Tenn.-based Goldleaf Financial Solutions Inc. on May 1 acquired Springfield-based DataTrade LLC in a $5.7 million transaction.

Customers, however, probably won’t notice many changes at DataTrade, which serves financial institutions with services including remote deposit and check scanning, remittance, voice and speech recognition, document and report management, and data conversion.

Though the company has changed its name to Goldleaf, 28 staff members at the 3653 South Ave. office will stay in place, said Colin McAllister, former DataTrade CEO, who now is DataTrade division manager for Goldleaf.

“That appealed to us, the acquisition philosophy of Goldleaf,” McAllister said. “One of their things is hiring good people, and we’ve assembled here a pretty darn good bunch of folks. Their acquisition strategy is to leave you alone and not mess with something that works.”

Acquisition-happy

Goldleaf, publicly traded on the Nasdaq under the symbol GFSI, has put its acquisition strategy into practice quite a bit lately – the company has completed four acquisitions in the last year, including the March acquisition of Dallas-based Community Banking Systems, which provides imaging systems to regional banks.

“In any company we look at, we look for a couple of things,” said Goldleaf Executive Vice President Scott Meyerhoff. “The first is solid management. We generally don’t take the approach of buying them for their intellectual property and stripping out the people. We look for fits on product, we look for fits on technology, and we look for fits on geography.”

Meyerhoff said Goldleaf, which provides integrated, technology-based services for financial institutions, also looks for companies that function well on their own and fit well with existing products and services.

In evaluating DataTrade, a private company founded in 1990, Goldleaf officials said they hit on all of those criteria. They were comfortable with McAllister and DataTrade President and Chief Operating Officer Clay Hamlet, who is staying with Goldleaf as a vice president. Also, DataTrade’s resources provided the opportunity for Goldleaf to increase its options for community financial institutions.

“They have really built a strong reputation in the marketplace,” Meyerhoff said of DataTrade, specifically citing the company’s methods of helping financial institutions and corporate customers convert data from an older format into a new one.

For DataTrade, Goldleaf offers a steady stream of potential customers.

“We added to their inventory, and on the flip side, they have significantly more feet on the street – salespeople – than we do,” McAllister said.

“When you put all that together, our growth, we believe, will accelerate more with them than if we tried to do it by ourselves,” he added.

Growth from within

DataTrade officials, in fact, were getting set for growth when Goldleaf approached the company regarding an acquisition.

In March, DataTrade reorganized its debt structure with Commerce Bank, and acquisition was not on the radar – a company press release from that time cited revenue growth between 30 percent and 40 percent for the years 2004–06. Remote deposit, remittance and check scanning were singled out as areas with growth potential.

McAllister said that growth is still expected within Goldleaf, which on May 14 reported revenues of $13 million, and net operating losses of 2 cents per share, for the quarter ended March 31.

“In terms of the merchant-remittance processing or lockbox platform, we can now go into a financial institution and to their commercial customers and offer those payment processing capabilities in a wide variety of flavors and abilities,” said Charles Potts, senior vice president with Goldleaf.

“Instead of us walking in with one bullet in our guns, we can walk in with a full repertoire of solutions.”