16 January 2018
visit www.avoka.com

Fifth Third Bancorp and Advent complete merchant processing buy out

01 July 2009  |  1791 views  |  0 Source: Fifth Third

Fifth Third Bancorp (NASDAQ: FITB) and Advent International announced today the consummation of their joint venture transaction for Fifth Third's processing business. Advent is purchasing an approximate 51% interest in Fifth Third's merchant acquiring and financial institutions businesses, most of the assets and operations of which are held by a limited liability company ("the LLC"). The transaction is valued at approximately $2.35 billion before valuation adjustments by either party. Fifth Third will retain an approximate 49% interest in the LLC, and will also retain its credit card issuing business, which includes retail credit card and commercial multi-card services.

"We believe we are very well positioned for the future," said Charles Drucker, CEO of Fifth Third Processing Solutions, LLC. "Our clients will maintain the same industry-leading platform as before, working with the same team, delivering the same high caliber client service they are accustomed to. Reaction to this transaction from our clients has been very favorable, and our employees are also excited about the future of this company."

"Fifth Third Processing Solutions has a highly efficient model and an experienced management team, and we are excited about the opportunity to invest in the growth of this business," said Chris Pike, a Managing Director at Advent. "We believe that our international relationships, sector experience and operational expertise, coupled with Fifth Third's sales and distribution capabilities, will make for a successful partnership."

"Today's closing begins a new chapter for this business and Fifth Third," said Kevin T. Kabat, Chairman, President and CEO of Fifth Third Bancorp. "This completes the capital plan we laid out in June of 2008, and enables us to focus more fully on leveraging the opportunities of the processing business with Advent and of our other businesses. We are pleased to be able to continue to participate in the future growth of Fifth Third Processing Solutions."

Fifth Third will recognize a pre-tax gain of approximately $1.7 billion ($1.0 billion after-tax) on the transaction. The transaction is expected to contribute an estimated $1.2 billion in Tier 1 common equity, and to enhance the Tier 1 common equity ratio by approximately 100 bps and the Tier 1 capital ratio by approximately 95 bps.

Advent has been investing in the financial services sector for over 20 years, and has backed more than 25 companies worldwide in a broad range of sub-sectors, including payments, transaction processing, and financial technology. Advent has made several investments of particular relevance to Fifth Third Proocessing Solutions: CSU CardSystem, a leading card processor in Brazil, which went public in 2006; Dolex Dollar Express, a leading money transfer business which Advent sold to Global Payments in 2003; and Monext, a French merchant acquirer and bank processor which Advent acquired in 2008.

Credit Suisse acted as exclusive financial advisor, while Sullivan & Cromwell, LLP, Chapman & Cutler, LLP, Alston & Bird, LLP, and Graydon Head & Ritchey, LLP acted as legal advisors to Fifth Third in this transaction. Morgan Stanley and Weil, Gotshal & Manges, LLP acted as financial and legal advisor, respectively, to Advent.

Comments: (0)

Comment on this story (membership required)

Related company news


Related blogs

Create a blog about this story (membership required)
visit www.ebaday.comvisit www.vasco.comvisit www.capgemini.com

Top topics

Most viewed Most shared
Buffett rubbishes cryptocurrencies; South Korea preps exchange crackdownBuffett rubbishes cryptocurrencies; South...
11024 views comments | 15 tweets | 17 linkedin
BNP Paribas Asset Management completes fund transaction blockchain testBNP Paribas Asset Management completes fun...
9759 views comments | 14 tweets | 32 linkedin
Crypto mining threatened by power capacity concernsCrypto mining threatened by power capacity...
8775 views comments | 17 tweets | 18 linkedin
Exchanges call for global fintech standardsExchanges call for global fintech standard...
8549 views comments | 17 tweets | 13 linkedin
Kodak announces blockchain plan, share price soarsKodak announces blockchain plan, share pri...
8275 views comments | 29 tweets | 24 linkedin

Featured job

London, UK (or flexible)

Find your next job