Fifth Third Bancorp (NASDAQ:FITB) and the private equity firm Advent International Corp. have completed their $2.35 billion processing joint venture. As The Deal Pipeline subscribers learned in March,
Advent agreed to acquire 51% of the Cincinnati bank's payment processing division for $561 million in cash. Fifth Third loaned $1.25 billion to the new venture, to be called Fifth Third Processing Solutions LLC.
The transaction boosts Fifth Third, which said it will recognize a pretax gain of approximately $1.7 billion. The bank is struggling to reverse a five-year slide in its stock price, and in May it announced it would sell as much as
$750 million in new stock.
The completion of Fifth Third's processing JV with Advent comes less than a week after Bank of America Corp. (NYSE:BAC) and First Data Corp. announced a similar transaction. In the deal announced on June 29,
First Data -- a highly leveraged portfolio company of Kohlberg Kravis Roberts & Co. -- and BofA formed Banc of America Merchant Services, a 1000-employee payment processing JV based in Atlanta.
- Suzanne Stevens
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