Popular, Inc. Signs Agreement to Sell Majority Interest in EVERTEC to Funds Managed by Apollo Management, L.P.
July 01 2010 - 9:19AM
Business Wire
Popular, Inc. (NASDAQ:BPOP) announced today that it entered into
an agreement and a plan of merger that contemplates funds managed
by Apollo Management, L.P. acquiring a 51% interest in Popular’s
processing subsidiary, EVERTEC, and related processing businesses,
through the establishment of a joint venture. The new joint venture
is valued at approximately $900 million. As part of the
transaction, Popular transferred its merchant acquiring and
processing and technology businesses to EVERTEC.
“We are enthusiastic about a new partnership with Apollo and we
will retain a 49% interest because we believe in EVERTEC’s growth
potential moving forward,” said Popular, Inc. Chairman & CEO
Richard L. Carrión. “Upon completion, this transaction will
conclude our current capital plan.”
“We are excited to be acquiring one of the leading transaction
processing companies in Latin America,” said Apollo senior partner
Marc Becker. “With EVERTEC, we believe we are partnering with the
top management team in the region and are confident in the growth
prospects for the company.”
The transaction is subject to certain regulatory approvals and
other closing conditions, and is subject to the parties completing
negotiations of certain agreements to support the transition of the
processing business to the joint venture and a master services
agreement pursuant to which EVERTEC will provide processing
services to Popular. Under the agreement, Apollo has the option to
require Popular to sell or retain EVERTEC’s operations in
Venezuela, which could result in a reduction of the transaction
consideration of approximately $30 million. The transaction is
expected to close in the third quarter of 2010.
The transaction is expected to result in a net gain after taxes
for Popular of approximately $600 million. The net cash proceeds to
be received by Popular after paying for transaction costs and taxes
are estimated at approximately $595 million. The sale is expected
to have a positive impact of approximately 2.4% on Tier 1 Common,
Tier 1 Capital and Total Capital ratios, and of approximately 1.7 %
on Popular’s Tier 1 Leverage ratio.
Goldman, Sachs & Co acted as the exclusive financial
advisor, while Sullivan & Cromwell LLP and McConnell Valdes LLC
acted as legal advisors to Popular in this transaction. Bank of
America Merrill Lynch and Morgan Stanley acted as financial
advisors for Apollo Management L.P. and also provided committed
financing for the transaction.
Founded in 1893, Popular, Inc. is the leading banking
institution by both assets and deposits in Puerto Rico and ranks
34th by assets among U.S. banks. In the United States, Popular has
established a community-banking franchise providing a broad range
of financial services and products with branches in New York, New
Jersey, Illinois, Florida and California. Popular provides
processing technology services through its processing subsidiary
EVERTEC, which processes approximately 1.1 billion transactions
annually in the Caribbean and Latin America.
About Apollo
Apollo is a leading global alternative asset manager with
offices in New York, Los Angeles,
London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong
Kong. Apollo had assets under management of over $53 billion as of
December 31, 2009, in private equity, credit-oriented capital
markets and real estate funds invested across a core group of nine
industries where Apollo has considerable knowledge and
resources.
An electronic version of this press release can be found at the
Corporation’s website, www.popular.com.
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