RBS to sell WorldPay to Advent. Bain Capital for £1.7 billion
07 Aug 2010
Royal Bank of Scotland (RBS) yesterday said that it has agreed to sell a majority stake in its Global Merchant Services (GMS) business to two private equity firms Advent International Corporation and Bain Capital for £1.7 billion ($2.7 billion).
RBS will sell a controlling 80.01-per cent interest in its credit-card payment processing unit GMS, also known as WorldPay, the UK's biggest credit card payment firm to Advent and Bain for an enterprise value of up to £2.025 billion and will retain a minority stake of 19.99 per cent in the new GMS group.
Based on an enterprise value of up to £2.025 billion including contingent consideration of £200 million, approximately £1.7 billion will be received in cash on closing of the sale.
RBS will receive an additional £200 million in the future if the returns realised by Advent and Bain exceed certain thresholds, said the Edinburgh-based bank in a statement.
RBS, which is 83-per cent owned by the UK government, will book a gain of about £850 million after goodwill, separation and transaction costs.
RBS said that it will continue to promote the GMS product suite as part of its offering to customers.