The Fort Worth, Texas-based payment processor is reportedly up for sale. First American currently produces about $80 million EBITDA and could sell for 9x, according to Reuters.
Two banking sources, however, tell me that FAPS is not up for sale. But a third person says the company was “quietly shopped” a few months ago. Goldman Sachs was advising First American, the third source says.
If successful, a sale would be a step in the right direction for First American, which was unsuccessful in its last auction process.
Lindsay Goldberg hired Citadel during the fall of 2010 to run a process for First American. The company, at the time, produced about $50 million EBITDA and was seeking bids of 12x, several sources told peHUB at the time. Many buyout shops—believed to include General Atlantic, TA Associates, Bain Capital, TPG, KKR and Warburg Pincus—put in proposals, sources say.
But all of the prospective bidders ended up walking away from the auction after conducting due diligence. First American, sources said, had unrealistic price expectations and was not worth 12x EBITDA, sources told peHUB.
Lindsay Goldberg, which acquired First American in 2003, ended up pulling the sale. Instead, the company paid out a $135 million dividend to shareholders, including Lindsay Goldberg. First American also distributed an $80 million dividend to Lindsay Goldberg in 2006, according to Thomson Reuters Loan Pricing Corp.
Officials for Lindsay Goldberg and First American could not be reached for comment. Goldman Sachs declined comment.
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