TA Associates’ sale of BluePay Processing took a wacky turn when negotiations to sell the payment processor were mistakenly revealed.
First Data Corp said it erroneously announced its buy of BluePay when a draft news release was “inadvertently” posted on its website Thursday morning. First Data yanked the announcement but later confirmed that it was in discussions with BluePay regarding a potential transaction. BluePay is backed by TA Associates.
“There can be no assurance that a transaction will be finalized and, if so, what will be the terms and conditions of any such transaction,” First Data said in statement.
The misstep occurred in a protracted auction of the Naperville, Illinois, payment processor. BluePay has been up for sale since June; Credit Suisse and Raymond James are advising on the process, Buyouts has reported.
The auction underwent a course correction after Vantiv made its $10 billion offer for WorldPay in August, Buyouts said. Vantiv and WorldPay were seen as likely bidders for BluePay, which caused TA to push final offers for the company to early October, the story said.
By September, most strategics had dropped out of the BluePay sale, leaving only private equity. Advent International, Onex Corp and Warburg Pincus were the firms left vying for BluePay, Buyouts said, mentioning First Data as possibly interested.
“The BluePay process [has] dragged on for a very long time, which is highly unusual in today’s market,” one PE executive said.
First Data “swooped in” after bids from the PE firms came in low, a source said. How much First Data is paying is unclear, but BluePay was expected to fetch $700 million to $800 million, Buyouts has reported.
BluePay provides payment-processing services for merchants and suppliers in the U.S. and Canada. The company offers services to more than 47,000 businesses and processes $14 billion in transactions annually.
The much bigger First Data, of New York, processes $2.2 trillion in transactions each year. First Data is backed by KKR. In July, First Data closed its $750 million buy of CardConnect.
TA acquired BluePay in 2013 for more than $200 million, Buyouts reported at the time. The firm’s investment came from TA XI, which collected $4 billion in 2009.
Executives for TA, KKR and Credit Suisse declined comment. BluePay, First Data, Raymond James, Advent, Onex and Warburg could not be reached for comment.
Action Item: Contact BluePay CEO Bala Janakiraman at +1 866-739-8324