Following the transaction, Michael Kennealy and Benjamin Spero from Spectrum and Michael Krupka from Bain will join Dana Bowers and Michael Bowers on the iPay board of directors. Kelli Schultz, iPay's president, and Todd MacLean from Bain will join as observers on the board. Terms of the transaction were not disclosed.

"iPay is one of the leading technology vendors to the banking industry, and we are excited to be involved in the next chapter of the company's history," said Michael Kennealy, managing director of Spectrum Equity Investors. "iPay is a perfect fit for Spectrum, given our firm's experience in financial services technology and focus on rapidly growing, profitable companies."

"The iPay management team has done an exceptional job building a world class bill payment solution that is now relied on by more than 1,100 financial institutions, making iPay the largest independent vendor in the industry," said Michael Krupka, managing director of Bain Capital Ventures. "We believe the business is poised for continued growth as the Internet bill payment industry matures and more financial institutions offer these services to their end customers."

Dana Bowers, co-founder and managing partner of iPay, said, "We are extremely pleased to have Spectrum and Bain as our new majority shareholders. As we considered a range of strategic alternatives, we were convinced that Spectrum and Bain were the right partners for iPay given their resources and industry expertise."

Michael Bowers, co-founder and managing partner of iPay said, "iPay has always provided innovative products and the highest level of services to its customers. With the financial resources of Spectrum and Bain behind us, we look forward to further capitalizing on new opportunities for the company."

iPay's BillPay-e products offer community banks and credit unions a one-stop solution to offer bill payment services to both consumers and small businesses. The BillPay-e technology integrates with numerous online banking applications, providing financial institutions a highly flexible solution that can be rapidly installed.

"iPay has a reputation for providing unparalleled levels of service to financial institutions of all sizes," said Benjamin Spero, principal at Spectrum Equity Investors. "iPay is the largest remaining independent provider focused solely on Internet bill payment services. Because iPay remains vendor agnostic, the company has become a trusted partner for multiple providers of other technology to community financial institutions."

iPay was advised on the transaction by William Blair & Company and debt financing was provided by CIT Lending Services.