Financial services technology solutions provider Fiserv has entered into a definitive agreement to sell 55% stake of the lending solutions business to private equity firm Warburg Pincus.
Under the terms of the transaction, Fiserv will receive nearly $395m in net after-tax proceeds and will continue to hold 45% equity interest in the business.
The new joint venture will work on all automotive loan origination and servicing products as well as associated Fiserv operations.
It will also be responsible for Fiserv’s LoanServ mortgage and consumer loan servicing platform, while Fiserv will retain its Secure Lending product for e-contracting and its UniFi mortgage origination solution.
The joint venture will be led by the Fiserv Lending Solutions president, Bret Leech.
Fiserv president and CEO Jeffery Yabuki said: “Fiserv is committed to delivering value for clients, and we expect this partnership with Warburg Pincus to further enhance service and innovation across the lending marketplace.
“In addition, we will continue to provide integration advantages to ensure that our collective clients get the best of both organisations to provide differentiated value for our clients, associates and shareholders.”
Warburg Pincus managing director Jim Neary said: “We see meaningful opportunity to further build this business into a leading platform in automotive and mortgage lending technology.”
The transaction, subject to customary closing conditions, is expected to close in this quarter.