Heartland Payment Systems Secures $40 Million Private Equity Financing from Greenhill Capital Partners and LLR Partners

Business Wire, Oct 12, 2001

Business Editors

FRISCO, Texas--(BUSINESS WIRE)--Oct. 12, 2001

Heartland Payment Systems Inc., an employee-owned, full-service credit card and payroll processing provider, Friday announced that it has received a $40 million private equity investment from Greenhill Capital Partners L.P. (New York), LLR Partners Inc. (Philadelphia), and their affiliated investment funds.

The $40 million infusion of new capital, representing a substantial minority stake, will be utilized to execute Heartland's long-range strategic business plan. This plan includes continuing the build-out of Heartland's national sales and service organization, developing the company's innovative transaction processing platform, strengthening various vertical market partnerships, and retiring the company's debt.

Brooks L. Terrell, Frisco-based chief technology officer, for Heartland Payment Systems, Princeton, N.J., stated, "The impact of this investment to our Frisco operation is significant. Heartland Payment Systems intends to continue to grow our face-to-face presence with local merchants and to expand our base of operations for both our Software Development Group and our Frisco-based Information Technology Team."

Greenhill Capital Partners and LLR Partners share a focus on developing long-term partnerships with the management teams of portfolio companies, and supporting them in building their businesses through direct involvement from beginning to end of every investment transaction.

Additionally, both of these private equity groups have significant investment flexibility to structure transactions to meet the unique needs of business owners and managers.

Robert H. Niehaus, chairman of Greenhill Capital Partners, said, "Bob Carr and the world-class management team that he has assembled have built Heartland into one of the leading independent merchant payment processors.

"With one of the largest and most productive direct sales forces and a culture focused on customer service, Heartland is well positioned to capitalize on the robust growth in the payment processing industry."

Mitchell L. Hollin, an LLR partner, said, "As a leading player in a fragmented industry, Heartland offers the scale and sophistication to leverage the trend toward alternative forms of electronic payments across its large and diverse merchant base."

Launched in early 1997 as a merchant card processor, Heartland Payment Systems has now evolved into a multiple product transaction processor, and has recently introduced HPS Exchange, which offers the industry's first client server based transaction processing platform.

"We are very pleased to find two strong financial partners to support our aggressive growth plans," said Robert O. Carr, the chief executive officer and chairman of Heartland.

Carr continued, "We have built our portfolio to an annual run rate of nearly $13 billion over the last four years with minimal capital, and feel this equity infusion is the key to both expanding our sales program and introducing innovative technology solutions to our merchant clients. We also look forward to utilizing our financial partners' substantial expertise in helping companies manage their growth."

About the Investors

Greenhill Capital Partners

Greenhill Capital Partners is a $425 million private equity fund managed by Greenhill & Co., an independent merchant banking firm owned entirely by its partners. Greenhill Capital Partners identifies investment opportunities by focusing on the proprietary deal flow provided by Greenhill & Co.'s insights into, and relationships within, the telecommunications, technology, financial services and consumer products industries.

From their offices in New York, London and Frankfurt, Germany, Greenhill & Co. provides a broad range of advisory and investment services. They are a premier international merchant bank in the classic tradition -- advising and investing, and when appropriate, committing firm capital alongside that of their clients.

Their core principles include building important long-term client relationships and pursuing opportunities where they can add value.

www.greenhill-co.com

LLR Partners

LLR Partners Inc. is a $260 million private equity firm providing capital to companies with strong growth potential, proven business models and outstanding management teams. LLR Partners primarily makes investments of $5 million to $20 million in a broad range of growth industries, with an emphasis on business services and information technology.

Headquartered in Philadelphia, LLR Partners generally targets expansion capital investments, but will also consider recapitalizations and private investments in public companies.

www.llrpartners.com

About Heartland

Heartland Payment Systems is a full-service payment systems solutions provider, handling merchant card and payroll processing services for over 50,000 merchants of all types and sizes.

Using a strategically located national sales force, Heartland builds long-term business relationships in local sales territories to provide merchants with enhanced technology tools that assist them in more effectively operating their businesses.