About

Open Solutions provides software to community-based financial institutions around the world. Open Solutions provides several platforms including DNA, an open real-time core banking platform. Open Solutions competes with Fiserv, Fidelity Information Systems, Jack Henry and Harland Financial.

Vector Capital initially invested in the Open Solutions Subordinated Notes in the open market in 2010. After building a close relationship with the management team, Vector Credit led an investment in Unsecured Term Loan in 2011. Open Solutions relied on the proceeds from Vector to repay borrowings on an existing Revolving Credit facility and avoid an upcoming covenant breach. With the improved liquidity, the management team at Open Solutions was able to focus on winning customers.

In early 2013 Open Solutions was acquired by Fiserv, a leading global technology provider serving the financial services industry.

Insight & Approach

Open Solutions has proven to be a technology leader in the financial services industry. The DNA product stack is based on a modern, object-oriented language and a real-time relational database. Major competitors were hawking software based on COBOL and mainframe batch processing. Open Solutions also had high customer satisfaction with its existing customers, as evidenced by a high retention rate.

Vector Capital recognized that the reason the company was struggling to win new customers was due to its over-levered capital structure. Despite a complicated capital structure dating back from an acquisition in 2007, Vector Capital structured a Term Loan that provided needed liquidity to the company while protecting the investment from principal loss.