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Frontenac Gets Busy
First, the Chicago-based private equity group bought Wassau Financial Systems (WFS), a $100 million supplier of automated payment processing systems like ATM’s and devices that capture check images. WFS systems are used by about 5,000 banks and other businesses to handle their “point-of-presentment” transactions.
Then a few days later Frontenac purchased control of Ampac as an add-on to its WNC platform unit. WNC operates systems that allow banks to private-label specialty insurance lines like flood coverage for their customers. In this capacity, WNC acts as a master general underwriter (MGU), which means that it assumes some of the risk of policies that it represents to banks.
Ampac also markets insurance products like mortgage insurance for use by bank customers but in contrast to WNC, it doesn’t assume policy risk. The company acts more like an outsourced insurance product sales force on behalf of bank clients.
The two deals emphasize Frontenac’s enthusiasm for businesses that permit smaller banks to “look bigger” to their customers in the face of ever larger, consolidating competitors like JP Morgan + Chase + Bank One.
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