Fiserv to Net $395M from Partial Sale of Business to Warburg Pincus
Fiserv, a financial technology business that has fueled its growth in part through a series of mergers and acquisitions, said Wednesday that the private equity firm Warburg Pincus purchased a controlling interest in Fiserv’s lending unit.
Brookfield, WI-based Fiserv (NASDAQ: FISV) said Warburg Pincus, of New York, acquired a 55 percent share in Fiserv’s Lending Solutions business. Fiserv said it expects to net about $395 million in after-tax proceeds under the terms of the deal. Fiserv will continue to control the remaining 45 percent of the lending division.
Fiserv provides banks, credit unions, and other financial institutions with software for processing customer deposits and managing general ledgers, among other things.
The company’s stock price finished the trading day Wednesday down about 1.2 percent, to $129.17 a share.
Fiserv said in a news release that under the terms of the deal with Warburg Pincus, the two companies will launch a joint venture that will include Fiserv’s products for issuing and servicing automotive loans. Fiserv said its product for servicing mortgages and consumer loans, known as LoanServ, will also be included. However, the joint venture will not include UniFi, Fiserv’s product for originating mortgages, the firm said.
In the release, Fiserv said “Warburg Pincus’ demonstrated expertise and track record in growing financial technology businesses of scale” is expected to create value for the Wisconsin company’s clients.
“We see meaningful opportunity to further build this business into a leading platform in automotive and mortgage lending technology,” Jim Neary, a managing director at Warburg Pincus, said in a prepared statement.
Bret Leech, who has led Fiserv’s lending division since early 2016, will lead the new joint venture, the company said.
The transaction is expected to close by the end of March.