Private equity is expected to bid for Cambridge Global Payments, which is up for sale, four sources said.
FT Partners is advising on the auction, the people said.
Cambridge Global, Toronto, provides payment technology and currency-risk management to more than 12,000 customers. The company is expected to generate C$75 million ($56.6 million) in 2017 EBITDA and is seeking bids of C$1 billion ($754.8 million), two sources said.
Initial bids are due late next week, one source, a banker, said. Because the transaction is expected to close in mid-2017, bankers are using Cambridge’s 2017 financials to value the business.
Jacques Feldman and Bernard Heitner founded Cambridge Global in 1992 as a retail FX broker and precious-metals dealer. Cambridge is a “pure B2B business and that’s why people like it,” the banker said. “There’s no consumer business in there.”
PE has frequently invested in the payments space. Firms including Vista Equity Partners, Thoma Bravo, Blackstone Group and CVC Capital Partners may be interested in Cambridge, sources said.
One of the larger payment-processing deals involved the much larger TransFirst, which handles about $48 billion in annual transaction volume for more than 200,000 merchants and financial institutions.
In April, Vista closed its $2.35 billion sale of TransFirst to TSYS after owning the company for less than two years. Welsh, Carson, Anderson & Stowe had owned TransFirst for seven years before selling it to Vista in 2014.
PE firms weren’t lucky with another Canadian payments company. Moneris, also Toronto, put its U.S. operations up for sale earlier this year. Blackstone and Genstar made final bids for Moneris U.S. but were beat out by Vantiv, Buyouts has reported.
FT Partners also advised SquareTrade, a consumer-protection-plan provider that is being sold to Allstate for $1.4 billion. The investment bank is also advising CardinalCommerce, a provider of e-commerce payment motivation, which Visa agreed to buy on Dec. 1. The CardinalCommerce sale is valued at “several hundred million,” the second source said.
Mergermarket previously reported news of the Cambridge Global sale.
Executives for Cambridge Global and Blackstone declined comment.
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