Extending its reach further in the
payments processing industry private equity firm Advent
International is to acquire 51 percent of US bank Fifth Third
Bancorp’s (FTB) merchant acquiring and financial institutions
processing businesses Fifth Third Processing Solutions in a cash
deal worth $561 million.
Under the terms of the deal Advent and FTB
will establish a new joint venture company which according to FTB
will be valued at $2.35 billion. The discrepancy between the
purchase price and the valuation relates to senior secured notes
payable to subsidiaries of FTB in the amount of $1.25 billion.
Commenting on the deal Advent’s MD Chris Pike
said: “Working with our operating partner, Pam Patsley, we had
identified Fifth Third Processing Solutions early on as the premier
company in the payment processing space.”
Patsley is the former president of First Data
International, where she was responsible for the company’s business
outside of the US from 2002 to 2007.
In 2008 FTB reported that its payments
processing operations generated total revenue of $913 million, up 3
percent compared with 2008, and total net income of $175 million.
FTB reported a total net loss of $2.18 billion in 2008.
Acquisition by US-based Advent of the
controlling stake in the JV with FTB follows its acquisition in
October 2008 of Monext, Irish financial and business support
services company Experian’s French card processing unit for an
undisclosed amount. Monext reported that in 2008 it processed 550
million transactions undertaken by holders of 2 million bank cards,
5 million private cards and 2 million transport cards.
Advent’s strategy for Monext is to triple its
revenue through organic growth and acquisitions over the next three
Past payment processing interests in Advent’s
portfolio have included CSU CardSystem, a Brazilian credit card
processor which went public in 2006, and Dolex Dollar Express, a
money transfer business which Advent sold to US payments processor
Global Payments in 2003 for $200 million.