Apollo Buys 51% Stake in EVERTEC

Apollo Management has bought a 51% stake in EVERTEC, a unit of Popular Inc., through a joint venture. Popular, a bank holding company in Puerto Rico, will receive about $570 million while the JV is valued at $868 million. As part of the deal, EVERTEC gets Popular’s merchant acquiring and processing and technology business.

PRESS RELEASE

Popular, Inc. (NASDAQ:BPOP) announced today the completion of the merger pursuant to which funds managed by Apollo Management, L.P. acquired a 51% interest in Popular’s processing subsidiary, EVERTEC, and related processing businesses, through the establishment of a joint venture. The new joint venture is valued at approximately $868 million. As part of the transaction, Popular transferred its merchant acquiring and processing and technology businesses to EVERTEC.

“This transaction concludes our capital plan,” said Popular, Inc. Chairman & CEO Richard L. Carrión. “We retained 49 percent in EVERTEC because we strongly believe this partnership has great potential to expand its business.”
“We are pleased this transaction has closed, and we look forward to partnering with Popular, the EVERTEC management team, its employees and customers to continue the expansion and growth of this strong franchise,” said Apollo senior partner Marc Becker.
The transaction is expected to result in a net gain after taxes for Popular of approximately $570 million. The net cash proceeds to be received by Popular after paying for transaction costs and taxes are estimated at approximately $610 million. The sale has a positive impact of approximately 2.22 percent on Tier 1 Common, Tier 1 Capital and Total Capital ratios, and of approximately 1.43 percent on Popular’s Tier 1 Leverage ratio.
In April of this year, Popular raised $1.1 billion in a public equity offering, which when combined with the gain in this transaction represents approximately $1.7 billion in new capital.
Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks 33rd by assets among U.S. banks. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey, Illinois, Florida and California.
About Apollo
Apollo is a leading global alternative asset manager with offices in New York, Los Angeles, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of over $53 billion as of December 31, 2009, in private equity, credit-oriented capital markets and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources.
An electronic version of this press release can be found at the Corporation’s website, www.popular.com.