The $75 billion-asset Popular disclosed in a
regulatory filing Thursday that it will pay $197 million for the assets by lowering
its stake in Evertec from about 16% to 10.5%.
The acquisition includes the Mi Banco digital banking platform, cash management online application and other digital customer service applications, Popular said in a slide deck.
The deal is
expected to close by June 30.
Popular said it expects the transaction to provide about $16
million in financial benefits in 2023.
Popular said using Evertec shares as consideration should result in an after-tax gain of about $135 million. The effect of the subsequent sell-down or conversion of Evertec shares to estimated to be $215 million in after-tax gains.
The “transaction accelerates our digital
transformation and increases our control of our customer channels,” Popular added.
Popular and Evertec also agreed to extend several commercial agreements that had an initial term ending in 2025.
Evertec was once a Popular unit, but the banking company sold a 51% stake in the payments business to Apollo Global Management in 2010. Evertec went public three years later.
“The deal should be earnings accretive in
subsequent years,” Alexander Twerdahl, an analyst at Piper Sandler, wrote in a
note to clients. “We view the announcement as a positive for Popular shares as
the deal should push earnings higher. and further reduce … share count, while
gaining more flexibility for Popular from an operational standpoint.”
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