From: J. Isaac (Ike) D. Rubin Sent: Monday, October 8, 2018 5:36:53 PM (UTC-05:00) Eastern Time (US & Canada) To: Jared Isaacman Subject: FW: Shift4 acquires three IS0's

FYI

Sent from my iPhone

From: [Redacted]
Sent: Monday, October 08, 2018 03:38 PM Eastern Standard Time
To: J. Isaac (Ike) D. Rubin
Subject: Shift4 acquires three IS0's

Just an FYI. Great relationship with C-suite and all sales leadership.

Begin forwarded message:

From: Jared Isaacman <jared@shift4.com> Date: October 8, 2018 at 1:24:57 PM EDT To: Undisclosed recipients:;
Subject: Shift4 acquires three IS0's

All, 

I wanted to share some very exciting news. At 9am PT this morning, we announced the acquisition of three 
merchant acquiring businesses. 

- CurvePay
- Vantiv  Litle ISO
- IRG

This will add ~20,000 merchants, >$12B in annual volume and >$40m in expected gross profit without 
taking on any personnel or real technical integration effort. All of these merchants can migrate to the 
Shift4 payment gateway with our 4Go migration tool \-‐‑ so represents great upside for additional 
gateway revenue and token fees. The merchants are primarily ecom and high-‐‑risk and also includes 
the Playboy portfolio.   

This was the culmination of about four months of effort. We began the effort by looking only at CurvePay, 
which is ~6,000 high-‐‑risk merchants representing $3B in annual processing volume. The original ask 
was $80m which we knew was high, but still worth exploring.  Curve was in pretty bad shape as they 
hadn't invested in their technology platform in years.  They also had a big problem in that they were 
dependent on another high-‐‑risk player, IRG, for all of their risk/underwriting services, merchant 
boarding and transaction reporting.  CurvePay had approached IRG about selling to them. IRG already 
had a pretty big operation consisting of ~4,000 merchants and $2.5B in volume but agreed to explore 
a combination with CurvePay.  At the same time, we were also looking at the Vantiv Litle ISO, which was a 
holdover from the Vantiv acquisition of Litle & Co dating back to 2012.  Litle was a beast of a gateway in 
the ecom space and was acquired for $400m+.  The challenge was that Vantiv, and now WorldPay, are 
really big and slow so never got around to fully integrating Litle until earlier this year... which resulted in 
many merchants leaving the platform.  Still, there were 9,000+ ecom merchants representing ~$7B in 
volume that were worth exploring. 

So we now had three potential acquisitions and decided to submit indications of interest on all of them on 
the same day.  Curve on their own.  IRG and Curve combined.  And all three together.  Our IOI for all three 
together was ~$70m subject to diligence and performance, which included potential earn-‐‑outs.  We 
knew from the start that we would leverage this transaction to raise capital.  We initially were going to 
approach Searchlight alone and just ask for $100-‐‑150m in growth capital but the more we looked at 
doing an acquisition in this space and the multiples public company acquirers were paying, we knew it 
would make sense to target a much bigger number.   

The acquirers in payments trade at insane multiples.  EVO Payments just went public at 18x EBITDA.  
Adyen went public at 80x EBITDA.  And Square trades at 100x EBITDA and a $33B valuation (despite 
showing minimal profits).  We compared this to Shift4, at the time, valued at just over $1B, 7.7x EBITDA 
and 1.5x revenue.   We were just so cheap compared to every public comp and to nearly every private 
equity transaction in the last 18 months.   We prepared an investor presentation and went on the road.  

I spent a week in NYC at the end of August meeting with investors such as Capital Group (American Funds), 
Wellington, T. Rowe, Blackstone, Advent and others.  The kicker was always that we weren't looking to 
sell the business -‐‑ we were looking for minority capital to continue to execute our strategy.  We felt 
that positioning an investment in Shift4 was like investing in Square when it had a $1B valuation.  All 
the risk was gone but there was so much upside left.  The investors loved it.   We had multiple groups 
commit $400-‐‑450m in minority capital at valuations between $1.8 -‐‑ $2.2B -‐‑ more than double the 
valuation from the Searchlight investment just over a year ago.      We were able to close the 
acquisitions for $55m plus earn-‐‑outs and plan to close the minority investment towards the end of 
October.  We have been using this time to announce the acquisition to our various audiences, begin 
planning for the Q4 road show for a potential IPO within the next year and build out the 
communications/messaging for the minority investment.   

As most of you know, I have shared my long-‐‑term vision for the business many times before.  We have all 
the assets needed to become the dominant global payments company and the strategy to get there, 
although most of that plan was focused on organic execution.  I think this transaction, which came 
together opportunistically, signals we are prepared to accelerate that plan through acquisitions as 
well.   

This is really big news.  We can all be excited about it.  Please share in the appropriate way within your 
teams. 

Thanks, 
Jared 

Jared Isaacman
10/18/ 5:50 PM
Hey Ike.  I know you have been traveling.   Are you available for a quick call?
Ike Rubin
Sure
10/18/ 5:30 PM

Jared Isaacman
Give me 5
10/18/ 5:30 PM

Ike Rubin
10/19/ 6:58 AM
Sorry I missed you yesterday but tied up rest of day.  Anytime today is good
Jared Isaacman
10/19/ 7:35 AM
Ok.  I will try in a little bit

Jared Isaacman  1/27/ 5:43 PM
Hey Ike.  Good catching up last week. Do you have availability this week?
Ike Rubin 1/27/ 5:48 PM
For sure.  How about tomorrow?

Jared Isaacman      1/28/ 10:31 AM
Yep. I will give a call in a few

Ike Rubin      1/29/ 11:48 AM
Jared, if you have a minute i have a quick update

Jared Isaacman 1/29/ 12:18 PM
yep.  can in a few

Jared Isaacman 2/13/ 7:49PM
Hey Ike.  I am around tomorrow if you want to catch up for a few

Ike Rubin 2/13/ 7:59 PM
Sounds good.  I am around

Jared Isaacman 3/1/ 8:32 AM
Morning Ike.   Do you have a few minutes to catch up today?
Ike Rubin 3/1 8:33 AM
Sure.  

Ike Rubin 3/1/ 8:56 AM
I am around.  Give me a heads up

Jared Isaacman 3/11 7:29 PM
Hey Ike.   Missed calling you last week. How is this week?
Ike Rubin 3/11/ 7:57 PM
Pretty good and in town all week

Jared Isaacman 4/4/ 12:45PM
Hey Ike.  I will be in NYC next week.   Will you?

Ike Rubin 4/4/ 12:56 PM
Unfortunately not.  I am here all week.   Will you be around at all?

Jared Isaacman
Wednesday perhaps
4/4/ 1:09 PM

Ike Rubin 4/4/ 1:09PM
Give a shout

Jared Isaacman 4/9/ 6:33 PM
Hey Ike.  I will try and swing by your office on Wednesday if your are around. Mid-morning
Ike Rubin 4/9/ 8:53 PM
Perfect.  See you then

Jared Isaacman 6/19/ 11:52 AM
Hey Ike.   I am going to be in NY next week.  Can we get together?

Ike Rubin 6/19/ 12:17 PM
Yes.  I am around all week

Jared Isaacman   7/15/ 9:20 PM
Hey Ike.  Can we catch up this week?

Ike Rubin  7/15/ 9:24 PM
Sure.  I am around

Jared Isaacman 7/15/ 10:32 AM
Ike.  Any interest in getting together in the next week or so?

Ike Rubin 7/15/ 10:40 AM
Yes.  How is your schedule looking?

Jared Isaacman 8/12/ 4:27 PM
Hey Ike.  I am going to be near your offices tomorrow afternoon.   Any chance you are around to meet up?

Ike Rubin 8/12/ 4:29 PM
I am.   Let me know when and i will be there

Jared Isaacman 8/12/ 4:35 PM
amazing.    I should be done around 230-3.   I can swing by around then. Thank you

Ike Rubin
Perfect
8/12/ 4:36 PM

Jared Isaacman  9/23/ 6:33 PM
Hey Ike.  I'm going to be in New York next week.   Are you around?

Ike Rubin 9/23/ 6:35 PM
I am in Monday, Wednesday and Thursday next week.
When will you be in town?