Almost a dozen years ago, Eric Reich and three of his University at Buffalo MBA classmates started a new business surveying college students for universities and corporations.

The venture got off to a promising start, winning $25,000 in seed capital as the first winners of the Henry Panasci Entrepreneurial Awards competition in 2001 and by 2008, Campus Labs had grown to 30 employees and had built a client list that included 350 colleges and universities.

And this week, the payoff came – in a big way.

The company, which started under the name Student Voice, was acquired in a deal worth more than $40 million by Higher One Holdings, a Connecticut-based company that helps colleges and universities disburse financial aid and process tuition payments from students.

The deal highlights Campus Labs' rise as one of the Buffalo Niagara region's most successful start-ups since the turn of the century. The company, which Reich, Michael Weisman and two other initial partners started, now has more than $10 million in annual sales and a client list that includes more than 650 campuses.

Campus Labs has about 90 employees at its main office on Ellicott Street, and another smaller office in Atlanta. Higher One plans to maintain those Campus Labs offices and keep its current staff, said Mark Volchek, Higher One's chief executive officer.

"One of the reasons we're so excited about [Volchek's] vision is that he's saying to keep doing what we're doing," Reich said. "That's one of the reasons we did this: Now we'll have so many more opportunities."

Reich and Weisman both said they will stay on with Campus Labs.

Reich said Campus Labs had been interested in partnerships to help speed its growth and fund initiatives for additional services. The seed for the acquisition was planted last fall, when Reich and Volchek met at an industry conference.

"It wasn't urgent because it was never the goal of Campus Labs to be acquired," Reich said. "We don't have any venture financing in the business. We don't have any investment pressure where there was the expectation of an exit or the goal of an exit. We were really going to do what we kept doing until we decided or determined that we could do even more with the right partner."

The deal will expand Higher One's reach into the higher education market and also add Campus Labs' software tools to help colleges and universities analyze data from class evaluations, accreditation standards and even participation in student activities.

"It's a big client base, a very relevant product," said Volchek, who was in Buffalo Wednesday to meet with Campus Labs' staff. "We believe we can help Campus Labs grow faster."

"Most colleges do not use the data they have available as efficiently as they could," Volchek said during a conference call. "The data that Campus Labs helps schools generate ... helps them understand how to better allocate resources to do what's best for students."

That information, in turn, helps those schools tailor programs and services that can lead to better recruiting, improved retention and more success for students, he said.

"By understanding what courses, programs and extracurriculars are working, schools can allocate resources more effectively," he said.

Higher One bought Campus Labs for $40 million in cash, plus options to purchase more than 400,000 shares of future Higher One stock. Campus Labs also can collect additional payments if its revenues next year surpass $12.5 million.

The deal comes at a time when Higher One has been criticized by some consumer groups over the fees it charges through its partnerships with colleges and universities to produce student ID cards and to offer student aid disbursements on debit or prepaid cards. Higher One officials said their fees are lower than those at big banks, and the company last week said it was eliminating some of its fees.

The acquisition will give Higher One access to a bigger swath of campuses. Higher One, which was started by three Yale University students, handles financial aid and payment disbursements at 830 campuses, serving about 6.2 million students, with a strong focus on two-year colleges. The company expects its sales to top $200 million this year.

Campus Labs has more than 650 campuses on its client list, mainly from four-year colleges, and Volchek said fewer than 20 percent of those schools overlap, providing a big opportunity for Higher One to sell other services to those customers.

Together, the two companies serve more than 1,250 campuses, with more than 10.5 million students.

Bloomberg News last week reported that Higher One had hired investment bankers to explore a possible sale of the company to private-equity firms. The company said it does not comment on "rumor or speculation."