Lovell Minnick to buy BluePay unit

Lovell Minnick Partners is buying part of First Data-backed BluePay Processing, a filing revealed on the FTC website on July 12.

BluePay Processing was selling a small subsidiary, according to Bart Mackey, a BluePay spokesman, in an emailed response.

A spokesman for the Radnor, Pennsylvania PE firm declined comment. The July 12 FTC filing did not disclose financial terms of the transaction. M&A deals valued at $90 million are required to be reported to the FTC and the Department of Justice prior to consummation. Early-termination notices appear on the FTC site after the regulator has conducted an antitrust review of a deal.

The FTC filing surprised many. “Maybe there was a piece [First Data] needed to sell for antitrust [approval] on the broader Fiserv deal,” one source said.

In January, Fiserv said it would buy First Data for $22 billion. The deal was hailed as one of the largest payments transactions at the time.

First Data, of New York, is a leading merchant acquirer that employs more than 22,000 people. It processes 93 billion transactions annually for more than 4,000 financial institutions.

First Data acquired BluePay for $760 million in 2017. It bought CardConnect for $750 million that year in a separate deal. Both companies now operate as CardConnect. First Data also scooped up Clover in 2013.

Fiserv, based in Brookfield, Wisconsin, is a fintech giant. It provides systems and services, like electronic bill payment and business process outsourcing, to financial institutions like banks and credit unions. More than one in three U.S. financial institutions use Fiserv’s services. It moves more than $75 trillion annually.

Lovell Minnick is a financial services-focused PE firm. The buyout shop invests between $30 million and $150 million per deal, according to its website. Lovell Minnick is known for investing in asset managers but has expanded into business services, specialty finance, insurance and financial technology. BluePay would be one of Lovell’s first major investments in the payments space.

KKR acquired First Data in 2007 in one of the largest deals during the PE boom of 2005 to 2007. The company was considered an albatross for KKR for much of its holding until First Data became profitable in 2015, the same year it went public.

KKR had been selling off chunks of First Data through secondary transactions. The buyout shop, however, is not offloading any shares with the sale to Fiserv. KKR will have 16 percent of the combined Fiserv-First Data, Buyouts reported in January.

Lovell Minnick declined comment. Executives for BluePay, First Data, KKR and Fiserv could not be reached for comment.

Action Item: Read First Data’s May proxy filing on its sale to Fiserv here.