South Mountain Merger Corporation

South Mountain Merger Corporation

Oct 19, 2020 by Roman Developer


ENTERPRISE VALUE: $1.3 billion

South Mountain Merger Corp. proposes to combine with Billtrust, a leader in B2B order-to-cash solutions with an implied estimated enterprise value of approximately $1.293 billion at closing.

Upon closing of this transaction, the Company intends to change its name to BTRS Holdings Inc. and is expected to trade on The Nasdaq Stock Market under a new ticker symbol. Billtrust’s management team led by Flint Lane, Founder and Chief Executive Officer, Steve Pinado, President, and Mark Shifke, Chief Financial Officer, will continue to lead the Company.

Billtrust is a leading provider of cloud-based software and integrated payment processing solutions that simplify and automate B2B commerce. Accounts receivable (AR) is broken and relies on conventional processes that are outdated, inefficient, manual and largely paper-based. Billtrust is at the forefront of the digital transformation of AR, providing mission-critical solutions that span credit decisioning and monitoring, online ordering, invoicing, cash application and collections. Billtrust’s solutions integrate with a number of ecosystem players, including financial institutions, enterprise resource planning (ERP) systems, and accounts payable (AP) software platforms, to help customers recognize revenue more quickly and efficiently. Customers use Billtrust’s platform to transition from expensive paper invoicing and check acceptance to efficient electronic billing and payments, which accelerates revenue capture, generates cost savings, and provides a better user experience.

Billtrust’s customers have a daunting task of capturing and applying payments from hundreds or thousands of their buyer customers, all via different channels and payment types. In November 2018, Billtrust created the Business Payments Network (BPN), which is a powerful network that connects buyers, suppliers, and financial institutions to simplify and streamline the process of accepting electronic payments. The BPN has built-in integrations with leading ERP and accounting systems, AP software providers, payment card issuers and payment acceptance networks. The BPN offers an online supplier business directory, programmatic payment preferences, payment acceptance flexibility and streamlined reconciliation of remittance data.

The transaction is expected to close in early 2021.


The transaction reflects an implied estimated enterprise value at closing of $1,293 million, representing an 8.0x and 10.5x multiple to 2021 expected GAAP total revenue of $161 million and Non-GAAP net revenue of $123 million, respectively.

The cash component of the purchase price to be paid to the equity holders of Billtrust is expected to be funded by South Mountain’s cash in trust (minus any redemptions by South Mountain’s existing public stockholders), and a $200 million private placement raised at $10.00 per share.

The balance of the consideration payable to the existing Billtrust equity holders will consist of shares of common stock of the Company.

Following the transaction, the Company is expected to be debt free with approximately $200 million in cash, offering significant capital flexibility for continued growth, both organic and inorganic.

Existing Billtrust equity holders have the potential to receive an earnout of additional shares of common stock and/or RSUs of the Company, if certain stock price targets are met as set forth in the definitive business combination agreement.


  • $200 Million fully committed PIPE at $10.00 Per Share from investors including Fidelity Management & Research Company, Franklin Templeton Investments, and Wellington Management Company


  • A minimum cash condition of $225 million of which $200 million has been committed via the PIPE and an incremental $22 million has been committed in the form of a non-redemption commitment from an institutional shareholder


  • Citi is serving as exclusive financial and capital markets advisor to South Mountain
  • Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to South Mountain in connection with the transaction.
  • J.P. Morgan is serving as exclusive financial and capital markets advisor to Billtrust
  • Cooley is serving as legal counsel to Billtrust in connection with the transaction.
  • Citi and J.P Morgan are serving as placement agents on the concurrent private placement
  • Mayer Brown is serving as legal counsel to the placement agents.


Executive Officers

Charles B. Bernicker, 54
Chief Executive Officer, President & Director

Mr. Bernicker most recently has acted as a consultant to the International Money Express Inc. (NASDAQ: IMXI) management team in connection with their merger with FinTech Acquisition Corp. II in July 2018. From 2012 until it was acquired by First Data Corp. (NYSE: FDC) in July 2017, Mr. Bernicker was the Chief Financial Officer of CardConnect, which merged with FinTech Acquisition Corp., a former SPAC, in July 2016. From 2010 until 2012, Mr. Bernicker was an Executive Director of Heartland Payment Systems, a merchant acquirer and payment processor. From 2008 until 2010, Mr. Bernicker was a Senior Vice President of Fraud Strategy for Bank of America and, prior to that, Mr. Bernicker held several leadership positions with Commerce Bancorp, prior to its acquisition by TD Bank NA in March 2008. Prior to joining Commerce Bancorp, from 2000 until 2004, Mr. Bernicker was the Chief Financial Officer of C/Base Inc, dba eCount, a stored-value card issuer. Mr. Bernicker was also a member of the Card Operations Risk Executive Council for Visa/USA. Prior to that, Mr. Bernicker was a member of the audit group in the Philadelphia office of Ernst & Young, LLP. Mr. Bernicker holds a bachelor’s degree in accounting from the University of Delaware.

Nicholas Dermatas, 35
Chief Financial Officer & Secretary

Mr. Dermatas most recently served as a Vice President of Finance at First Data Corp. (NYSE: FDC). From 2012 until it was acquired by First Data Corp. (NYSE: FDC) in July 2017, Mr. Dermatas was the Senior Vice President of Finance of CardConnect, which merged with FinTech Acquisition Corp., a former SPAC, in July 2016. From 2009 until 2011, Mr. Dermatas was an Associate of Carousel Capital Partners, a private equity investment firm that invests in companies headquartered in the Southeastern United States. From 2007 until 2009, Mr. Dermatas was an Analyst at Edgeview Partners, now Piper Jaffray (NYSE: PJC), a middle-market advisory firm specializing in mergers and acquisitions. Mr. Dermatas holds a bachelor’s degree in Electrical Engineering from the Georgia Institute of Technology.


Board of Directors

Robert L. Metzger, 51

Mr. Metzger is a Clinical Assistant Professor at the University of Illinois at Urbana-Champaign Gies College of Business and has served as the Director of the Investment Banking Academy since August 2015, and as the Director of Honors Programs since January 2016. He has served as a member of the Audit Committee and the Board of Directors of WageWorks, Inc. (NYSE: WAGE) since February 2016, as a member of the Audit Committee and Board of Directors of USA Technologies (NASDAQ: USAT), Inc. since December 2016 and as a member of the Audit Committee and Board of Directors of JetPay Corporation since November 2017, prior to their acquisition by NCR (NYSE: NCR) in December 2018. Since 2016, Mr. Metzger has served as a senior advisor at MissionOG, a venture capital firm. Mr. Metzger was a Partner at William Blair & Company, L.L.C. from January 2005 to December 2015 after joining the firm in 1999, and since January 2016, he has been employed as a Senior Director at the firm. He served as the head of the Technology group between January 2011 and January 2015 and of the Financial Services Investment Banking Group between April 2007 and December 2015. He also acted as Chairman of the firm’s Audit Committee from January 2013 to December 2015. Prior to joining William Blair & Company, L.L.C., he worked in the Investment Banking Division of ABN AMRO Incorporated from 1997 to 1999, in the Financial Institutions Group at A.T. Kearney, Inc. from 1995 to 1997, and in Audit and Audit Advisory Services at Price Waterhouse from 1990 to 1994. Mr. Metzger graduated with a Master’s in Business Administration with concentrations in Finance and Strategy in 1995 from Northwestern University’s Kellogg School of Management and a Bachelor of Science degree in Accountancy in 1989 from the University of Illinois at Urbana-Champaign.

Douglas J. Pauls, 60

Mr. Pauls has over 30 years of experience in the areas of finance, accounting, internal controls, and financial reporting for public companies, including most recently senior roles with financial institutions. Mr. Pauls served as Chief Financial Officer of BankUnited, Inc., a bank holding company, from 2009 until his retirement in 2013. From 2008 until 2009, Mr. Pauls served as Executive Vice President of finance for TD Bank, NA following TD Bank’s acquisition of Commerce Bancorp, Inc. in March 2008. Prior to that, Mr. Pauls held several positions with Commerce, including serving as its Chief Financial Officer from 2002 until its acquisition by TD Bank and its Chief Accounting Officer from 1995 to 2002. Earlier in his career, Mr. Pauls was a senior manager in the audit department of Ernst & Young in Philadelphia and Pittsburgh, Pennsylvania. He is currently a director of BankUnited, Inc. (NYSE: BKU), where he serves as the Chairman of the Risk Committee, Essent Group Ltd. (NYSE:ESNT), where he serves as Chairman of the Audit Committee, and Global Atlantic Financial Group Limited, where he also serves as Chairman of the Audit Committee. Mr. Pauls holds a BA in Economics from Dickinson College and serves on Dickinson’s Board of Trustees.

Scott O’Callaghan [Appointed June 29, 2020]
Director, Class III

Mr. O’Callaghan is currently the Managing Director of Onex Credit and focuses on Onex Credit’s fundraising efforts. Mr. O’Callaghan has 34 years of experience in the leveraged credit markets, including business development roles for alternative credit investment firms.  Before joining Onex Credit in 2019, Mr. O’Callaghan was a partner and managed business development for Rotation Capital Management and MidOcean Credit Partners.  Previously he was global head of leverage finance sales at Bank of America, and held various positions at Deutsche Bank, Bankers Trust, Drexel Burnham Lambert and Manufacturers Hanover Trust. Mr. O’Callaghan earned a B.A. from Brown University in 1986.