Who Owns i3 Verticals Company?

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Who owns i3 Verticals?

Understanding the ownership of i3 Verticals, Inc. is key to grasping its strategic path. The sale of its merchant services business for about $438 million in September 2024 marked a significant shift. Founded in 2012 by Greg Daily, the company, initially Charge Payment, LLC, focused on integrated payment and software for sectors like education and healthcare.

As a public entity in fiscal year 2024, i3 Verticals reported revenues near $400 million. Its market cap was around $522.4 million in Q3 2024. The company specializes in payment processing and POS systems for public sector and healthcare markets.

The ownership landscape of i3 Verticals has evolved, influenced by founders, institutional investors, and public shareholders, especially after recent strategic moves. For a deeper look at market influences, consider an i3 Verticals PESTEL Analysis.

i3 Verticals was established in 2012 by Greg Daily, who also serves as its Chairman and CEO, alongside President Rick Stanford. Daily's extensive background in the payments sector, including founding iPayment, Inc. and co-founding PMT Services, Inc., provided a strong foundation for the company's growth. The company's early strategy focused on acquisitions, funded by private capital, before its public market debut.

Founding Leadership

Greg Daily, a seasoned payments industry veteran, co-founded i3 Verticals with Rick Stanford. Daily's prior entrepreneurial successes laid the groundwork for the company's strategic direction.

Early Capitalization

The company's inception was supported by private capital. This initial funding was crucial for implementing its acquisition-focused growth model.

Pre-IPO Structure

Before its Initial Public Offering (IPO), i3 Verticals underwent a reorganization. This involved converting various unit types into common units, establishing the early ownership framework.

Ownership Evolution

Early ownership was structured within i3 Verticals, LLC, with 'Continuing Equity Owners' and 'Former Equity Owners' identified. This setup ensured significant influence for the founding team.

Strategic Focus

The company's strategic vision centered on integrated software and payments within niche markets. This specialization guided its early development and acquisition targets.

Founders' Experience

Greg Daily's prior experience, including founding iPayment, Inc., was instrumental. This deep industry knowledge informed the company's operational and strategic decisions from its inception.

While the precise initial equity distribution among founders is not publicly disclosed, the early ownership of i3 Verticals was organized under i3 Verticals, LLC. This structure preceded the company's transition to public markets. The reorganization involved classifying equity holders into 'Continuing Equity Owners' and 'Former Equity Owners'. Various unit types, such as Class A units, common units, and Class P units (profits interests), were converted into either Class A voting common units or Class B non-voting common units of i3 Verticals, LLC. These foundational agreements were key to establishing a multifaceted ownership model, where 'Continuing Equity Owners' maintained substantial economic stakes and voting rights, underscoring the founding team's continued impact on the company's strategic direction, particularly its focus on niche markets for integrated software and payments. Understanding this early structure is crucial for grasping the Marketing Strategy of i3 Verticals.

Key Aspects of Early Ownership

The initial ownership structure of i3 Verticals was designed to reflect the contributions and ongoing involvement of its founders and early investors.

• Founders Greg Daily and Rick Stanford established the company in 2012.
• Private capital funded the company's inception and acquisition-led growth strategy.
• Pre-IPO reorganization involved converting various unit types into common units.
• 'Continuing Equity Owners' retained significant economic interest and voting power.
• The ownership structure supported the company's focus on integrated software and payments in niche markets.

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The ownership structure of i3 Verticals has evolved significantly since its public debut. An Initial Public Offering (IPO) on June 21, 2018, on the Nasdaq Global Select Market under the ticker 'IIIV' was a pivotal moment, raising approximately $60 million. This event allowed for substantial capital infusion, fueling both acquisitions and organic growth initiatives.

Following the IPO, i3 Verticals implemented a dual-class share structure. Class A common stock holders possess both voting and economic rights, while Class B common stock holders, primarily the 'Continuing Equity Owners' including founders, hold voting rights but no direct economic rights. Their economic stake is maintained through common units in i3 Verticals, LLC. Initially, these 'Continuing Equity Owners' held about 66.0% of the economic interest and voting power. However, a significant sale of the merchant services business in September 2024 adjusted this, with 'Continuing Equity Holders' now representing approximately 30.3% of the economic interest and voting power. As of March 21, 2025, i3 Verticals, Inc. holds about 73% of the common units of i3 Verticals, LLC, with Class B common stock holders owning the remaining 27%.

Key Stakeholders in i3 Verticals

Institutional investors are the dominant force in i3 Verticals' ownership landscape. As of April 2025, they collectively held 94.77% of Class A common shares, indicating significant trust in the company's direction and potential. This concentration of institutional ownership often influences strategic decisions and governance, aligning management's focus with broader shareholder value, a key aspect of the Growth Strategy of i3 Verticals.

• T. Rowe Price Investment Management, Inc. holds 9.84% of shares.
• The Vanguard Group, Inc. possesses 5.75% of shares.
• BlackRock, Inc. maintains a 5.52% stake.
• Geneva Capital Management LLC holds 5.85% of shares.
• Insider ownership, including founders and executives, accounts for 2.90%.
• Gregory S. Daily, Chairman and CEO, is a significant individual shareholder with 22.26% ownership.

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The i3 Verticals, Inc. board of directors is led by Greg Daily, who serves as both Chief Executive Officer and Chairman. Following a significant business sale in September 2024, Clay Whitson transitioned to Chief Strategy Officer, continuing his role on the board. This leadership structure guides the company’s strategic direction and governance.

The voting power within i3 Verticals, Inc. is structured through a dual-class share system. Both Class A and Class B common stock carry one vote per share. However, Class B shares are exclusively held by 'Continuing Equity Owners' and their permitted transferees, with no economic rights attached directly to the stock itself. Their economic interest is tied to their holdings in i3 Verticals, LLC, and they possess the option to exchange their LLC units and Class B shares for Class A common stock on a one-to-one basis. This mechanism ensures that while voting power is distributed, economic alignment is maintained.

Understanding i3 Verticals Ownership Structure

i3 Verticals employs a dual-class share structure to manage voting power and economic interests. This system is key to understanding who owns i3 Verticals and how decisions are made.

• Class A and Class B common stock each grant one vote per share.
• Class B shares are held by 'Continuing Equity Owners' and lack direct economic rights.
• Economic interests for Class B holders are linked to their i3 Verticals, LLC units.
• Class B shareholders can exchange their units and shares for Class A stock.
• The company's operational control rests with i3 Verticals, Inc. as the sole managing member of i3 Verticals, LLC.
• Post-sale of the merchant services business in September 2024, 'Continuing Equity Holders' voting power decreased to approximately 30.3%.
• This structure aims to balance control with economic accountability for all i3 Verticals stakeholders.

i3 Verticals, Inc. operates as the sole managing member of i3 Verticals, LLC, which is central to its operational control. While the 'Continuing Equity Holders,' including the company founders, initially held a significant portion of the voting power after the initial public offering, this percentage was reduced to approximately 30.3% following the sale of the merchant services business in September 2024. This arrangement, which provides a degree of control to the original equity holders, also works to align their interests with those of the broader public shareholders through the one-share-one-vote principle applicable to both classes of stock. This ensures that substantial control is not exercised without corresponding economic accountability. Understanding the Target Market of i3 Verticals can provide further context on the company's strategic direction and stakeholder interests.

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Over the past few years, i3 Verticals has undergone significant strategic realignments, including major divestitures and targeted acquisitions. These moves have reshaped its ownership landscape and operational focus, primarily concentrating on the Public Sector. Institutional investors remain the dominant shareholders, underscoring a stable ownership structure despite these strategic shifts.

The company's strategic direction has been significantly influenced by recent divestitures, notably the sale of its merchant services business to Payroc WorldAccess, LLC for approximately $438 million in September 2024, and the divestiture of its Healthcare Revenue Cycle Management (RCM) business to Infinx for $96 million in May 2025. These actions have sharpened the company's focus on its Public Sector vertical. Complementing these sales, i3 Verticals has pursued strategic acquisitions, including a utility billing software company for $9.0 million in April 2025, and previously AccuFund in January 2023 and BIS in February 2021. These moves reflect a deliberate strategy to consolidate and strengthen its position in GovTech and Payments sectors. Leadership adjustments have also occurred, with Geoff Smith appointed CFO and Clay Whitson becoming Chief Strategy Officer in September 2024, indicating a focus on financial and strategic oversight. This strategic reshaping is detailed further in the Revenue Streams & Business Model of i3 Verticals article.

Institutional Investor Dominance

As of April 2025, institutional investors held a substantial 94.77% of Class A common shares. Mutual funds, a key component of this institutional ownership, saw a slight decrease in their holdings from 66.96% to 65.91% during the same period.

Insider and Shareholder Value Focus

Insider holdings increased to 2.90% by February 2025. The company's board approved a new $50 million share repurchase program in August 2025, signaling management's confidence and a commitment to enhancing shareholder value.

Financial Outlook and Growth Projections

Analysts project high-single-digit organic revenue growth for fiscal years 2024 and 2025. The company's FY2025 revenue guidance is set between $243 million and $263 million, indicating a positive financial trajectory post-restructuring.

Strategic Acquisitions and Divestitures

Recent strategic actions include the sale of its merchant services business for $438 million and its Healthcare RCM business for $96 million. These divestitures are balanced by acquisitions, such as a utility billing software company for $9.0 million, reinforcing a focused business model.

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