Warburg Pincus buys majority stake in Fiserv lending business for $395m
Private equity firm Warburg Pincus is busy again with the acquisition of a 55% share of the lending solutions business of Fiserv.
As reported in November, Raiffeisen, the third largest banking group in Switzerland, revealed it was selling its 10% stake in core banking tech vendor Avaloq to Warburg Pincus. The latter already owns 35% of Avaloq (the acquisition was completed in mid-2017).
In the latest deal, Fiserv will receive approximately $395 million in net after-tax proceeds and retain a 45% equity interest in the business.
The joint venture will include all of the automotive loan origination and servicing products and related operations of Fiserv, as well as its LoanServ mortgage and consumer loan servicing platform.
Fiserv says it will retain its Secure Lending product for e-contracting and its UniFi mortgage origination solution.
The business will continue to be led by Bret Leech, currently president of Fiserv Lending Solutions.
Jeffery Yabuki, president and CEO, Fiserv, adds that the deal will 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”.
The transaction, which is subject to customary closing conditions, is targeted to close in the first quarter of 2018.