By CultureBanx Team
- Robert F. Smith’s Vista Equity Partners is no longer selling a 50% stake in payments giant Finastra
- Last year Vista raised a massive sum of $16 billion for its latest fund
Vista Equity Partners, helmed by Robert F. Smith is reportedly putting the brakes on selling a 50% stake in London-based FinTech payments giant Finastra, as the COVID-19 outbreak puts pressure on the private equity market. Bloomberg reported that Vista selling half of its stake in Finastra would have valued the business at more than $10 billion including debt. Is the pandemic to blame for the slow down in deal making?
Why This Matters: Vista isn’t the only private equity company putting European FinTech sale’s on hold, several other companies have as well amounting to almost $20 billion. Prior to the coronavirus outbreak, PitchBook found that the cyclical nature of buyout fundraising meant this year’s totals were going to be much lower than they were in 2019. Last year Vista raised a massive sum of $16 billion for its latest fund, a record for independent technology buyout funds, likely taking them off the market for a year or two. The WSJ found Vista maintained strong returns for investors since 2000. That includes “a 2.84 times net multiple of invested capital and a 32.6% net internal rate of return across realized fund investments as of March 31.”
If Vista decided to put Finastra back on the market, theoretically they should have several suitors due the reportedly $1.9 billion in annual revenue and 10,000 workers, which make it an attractive target. Now the company handles payments, retail banking, treasury desks and mortgage lending for about 90 of the top 100 banks in the world.
Finastra also has about $6 billion in debt, according to data compiled by Bloomberg. Additionally, a stake sale could pave the way for a future IPO in the U.S. or a complete sale of Finastra. Prior to shelving the sale, Vista was working with Goldman Sachs to gauge interest from potential buyers.
Situational Awareness: A total of 198 tech funds raised more than $122 billion during 2019. Other notable private equity firms that have raised huge funds include Silver Lake and Thoma Bravo at $15 billion and the $12.6 billion respectively. Specifically, Vista’s latest raise $16 billion raise comes less than two months after it closed on its $850 million Endeavor Fund II.
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