CD&R Enters RBS WorldPay Process

LONDON (Reuters) – Clayton, Dubilier & Rice (CD&R), the venerable U.S. buyout house, has entered the crowded field of suitors vying for Royal Bank of Scotland Group Plc’s (RBS.L) $4 billion payment-processing arm, people familiar with the matter said.

CD&R’s emergence is unusual, because the sale of RBS’s Global Merchant Services (GMS) business is already in a second round of bidding. It comes just days after American Express Co (AXP.N) and Permira [PERM.UL] were revealed as potential joint bidders.

Aside from Amex-Permira, CD&R is competing with five other sets of bidders: Atos Origin (ATOS.PA) SA, CVC Capital Partners [CVC.UL] and Welsh, Carson, Anderson & Stowe; Advent International and Bain Capital; Canada’s Moneris Solutions; TPG [TPG.UL]; and Warburg Pincus [WP.UL].

CD&R and RBS declined to comment.

Europe’s competition regulators compelled RBS to sell GMS, which includes the WorldPay business, after the bank took tens of billions of pounds in state support. The business could fetch some 2.5 to 3 billion pounds ($3.6 to $4.3 billion).

CD&R finished raising a new, smaller-than-expected $5 billion fund last year. In December it bought British Car Auctions (BCA) from rival Montagu Private Equity.

Founded in 1978, CD&R is one of the world’s oldest private equity firms. It led the $15 billion takeover of Hertz car rentals from Ford Motor Co (F.N) in 2005.

Many of CD&R’s existing investments focus on industrial businesses or service industries rather than technology, with portfolio companies that treat water, supply laboratory equipment, and make metal products for construction firms.

It is not clear if CD&R is working alone or if it has lined up financial or technology partners for its bid.

($1=.7017 Pound)

By Quentin Webb and Simon Meads
(additional reporting by Steve Slater; editing by Douwe Miedema)