Business Well Positioned for Future Growth CINCINNATI and BOSTON,
June 30 /PRNewswire-FirstCall/ -- 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 Processing 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. About Fifth Third Bancorp and Fifth Third
Processing Solutions Fifth Third Bancorp is a diversified financial
services company headquartered in Cincinnati, Ohio. As of March 31,
2009, the Company had $119 billion in assets, operates 16
affiliates with 1,317 full-service Banking Centers, including 99
Bank Mart(R) locations open seven days a week inside select grocery
stores and 2,354 ATMs in Ohio, Kentucky, Indiana, Michigan,
Illinois, Florida, Tennessee, West Virginia, Pennsylvania,
Missouri, Georgia and North Carolina. Fifth Third operates four
main businesses: Commercial Banking, Branch Banking, Consumer
Lending, and Investment Advisors. Fifth Third also has a 49%
interest in Fifth Third Processing Solutions, LLC. Fifth Third is
among the largest money managers in the Midwest and, as of March
31, 2009, had $166 billion in assets under care, of which it
managed $23 billion for individuals, corporations and
not-for-profit organizations. Investor information and press
releases can be viewed at http://www.53.com/. Fifth Third's common
stock is traded on the NASDAQ(R) National Global Select Market
under the symbol "FITB." Fifth Third Processing Solutions is a
premier source of payment acceptance services for leading
businesses nationwide, providing electronic funds transfer (EFT),
debit, credit and merchant transaction processing to support the
complex payment strategies for the Bank and its merchant and
financial institutions clients. In 2008, Fifth Third Processing
Solutions processed over 28.4 billion ATM and point of sale
transactions and processed over $292 billion of debit and credit
card sales volume. Additionally, Fifth Third Processing Solutions
supports over 173,000 merchant and financial institution locations
and 11,000 ATMs in 44 states and 11 countries. According to the
Nilson Report (March 2009), Fifth Third is the fourth largest U.S.
merchant purchase transaction acquirer. About Advent International
Founded in 1984, Advent International is one of the world's leading
global buyout firms, with offices in 15 countries on four
continents. A driving force in international private equity for 25
years, Advent has built an unparalleled global platform of over 140
investment professionals across Western and Central Europe, North
America, Latin America and Asia. The firm focuses on international
buyouts, strategic repositioning opportunities and growth buyouts
in five core sectors, working actively with management teams to
drive revenue growth and earnings improvements in portfolio
companies. Since inception, Advent has raised $24 billion in
private equity capital and, through its buyout programs, has
completed more than 250 transactions valued at approximately $45
billion in 35 countries. More information about Advent
International is available at http://www.adventinternational.com/.
FORWARD-LOOKING STATEMENTS This news release contains statements
that we believe are "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Rule
175 promulgated thereunder, and Section 21E of the Securities
Exchange Act of 1934, as amended, and Rule 3b-6 promulgated
thereunder. These statements relate to our financial condition,
results of operations, plans, objectives, future performance or
business. They usually can be identified by the use of
forward-looking language such as "will likely result," "may," "are
expected to," "is anticipated," "estimate," "forecast,"
"projected," "intends to," or may include other similar words or
phrases such as "believes," "plans," "trend," "objective,"
"continue," "remain," or similar expressions, or future or
conditional verbs such as "will," "would," "should," "could,"
"might," "can," or similar verbs. You should not place undue
reliance on these statements, as they are subject to risks and
uncertainties, including but not limited to the risk factors set
forth in our most recent Annual Report on Form 10-K and our most
recent quarterly report on Form 10-Q. When considering these
forward-looking statements, you should keep in mind these risks and
uncertainties, as well as any cautionary statements we may make.
Moreover, you should treat these statements as speaking only as of
the date they are made and based only on information then actually
known to us. There are a number of important factors that could
cause future results to differ materially from historical
performance and these forward-looking statements. Factors that
might cause such a difference include, but are not limited to: (1)
general economic conditions and weakening in the economy,
specifically the real estate market, either nationally or in the
states in which Fifth Third, one or more acquired entities and/or
the combined company do business, are less favorable than expected;
(2) deteriorating credit quality; (3) political developments, wars
or other hostilities may disrupt or increase volatility in
securities markets or other economic conditions; (4) changes in the
interest rate environment reduce interest margins; (5) prepayment
speeds, loan origination and sale volumes, charge-offs and loan
loss provisions; (6) Fifth Third's ability to maintain required
capital levels and adequate sources of funding and liquidity; (7)
maintaining capital requirements may limit Fifth Third's operations
and potential growth; (8) changes and trends in capital markets;
(9) problems encountered by larger or similar financial
institutions may adversely affect the banking industry and/or Fifth
Third (10) competitive pressures among depository institutions
increase significantly; (11) effects of critical accounting
policies and judgments; (12) changes in accounting policies or
procedures as may be required by the Financial Accounting Standards
Board (FASB) or other regulatory agencies; (13) legislative or
regulatory changes or actions, or significant litigation, adversely
affect Fifth Third, one or more acquired entities and/or the
combined company or the businesses in which Fifth Third, one or
more acquired entities and/or the combined company are engaged;
(14) ability to maintain favorable ratings from rating agencies;
(15) fluctuation of Fifth Third's stock price; (16) ability to
attract and retain key personnel; (17) ability to receive dividends
from its subsidiaries; (18) potentially dilutive effect of future
acquisitions on current shareholders' ownership of Fifth Third;
(19) effects of accounting or financial results of one or more
acquired entities; (20) difficulties in separating and streamlining
the operations of the LLC; (21) lower than expected gains related
to any sale or potential sale of businesses; (22)other difficulties
in separating the merchant acquiring and financial institutions
businesses from Fifth Third; (23) loss of income from any sale or
potential sale of businesses that could have an adverse effect on
Fifth Third's earnings and future growth;(24) ability to secure
confidential information through the use of computer systems and
telecommunications networks; and (25) the impact of reputational
risk created by these developments on such matters as business
generation and retention, funding and liquidity. You should refer
to our periodic and current reports filed with the Securities and
Exchange Commission, or "SEC," for further information on other
factors which could cause actual results to be significantly
different from those expressed or implied by these forward-looking
statements. DATASOURCE: Fifth Third Bancorp CONTACT: Investors,
Jeff Richardson, +1-513-534-0983, or Rich Rosen, +1-513-534-3307;
or Media, Debra DeCourcy, APR, +1-513-534-4153, or Advent Media
Inquiries, Marissa Wolf, +1-212-850-5629 Web Site:
http://www.53.com/
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