Exclusive: RBC, BMO planning sale of $2-billion Canadian payments venture, sources say
Moneris is one of the largest payment processors in Canada, handling one in every three business transactions in the country. It was founded in 2000 by the two banks, and offers digital, mobile, and in-store payment systems for about 325,000 merchant locations, according to its website.
The owners are in the early stages of exploring a potential sale of Moneris, according to the people, who asked not to be named because the talks are private. Boutique investment bank PJT Partners (PJT.N), opens new tab, as well as investment bankers from RBC Capital Markets and BMO Capital Markets, are advising on the sale effort.
Moneris generates nearly $700 million in annual revenue, so the sources estimated this could equate to a $2-billion valuation, or slightly below that amount.
A sale is not guaranteed, and the owners could ultimately retain some or all of the business, the people added.
BMO, Moneris, and PJT declined to comment. RBC did not respond to a request for comment.
As the pace of digitization has increased in the North American payments industry in recent years, with the need to regularly spend capital to remain competitive, many banks have shed their payments businesses.
They have found willing buyers in payments companies, which have been growing through mergers and acquisitions to boost geographic scale and product offerings, as well as private equity firms, which value the recurring fee revenue that payments businesses generate.
Last month, Canada's TD Bank (TD.TO), opens new tab said it was forming a strategic partnership with Fiserv (FI.N), opens new tab in relation to its Canadian merchant payments business.
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