Brookfield-based financial services technology developer Fiserv Inc. has agreed to sell the majority stake in its Lending Solutions business to private equity firm Warburg Pincus LLC for $395 million.
New York-based Warburg Pincus has agreed to acquire a 55 percent share of the business, and Fiserv will retain a 45 percent equity interest. The transaction is expected to close in the first quarter.
Lending Solutions develops technology platforms for auto loan origination, servicing and processing. It also offers systems for mortgage and consumer loan servicing. The joint venture will include the auto loan origination and servicing, and the LoanServ mortgage and consumer loan servicing platform. Not included are the Secure Lending product for e-contracting and the UniFi mortgage origination platform.
Fiserv said its business will benefit from the private equity firm’s experience in driving growth at financial technology businesses.
“We are pleased to partner with Fiserv and the Lending Solutions leadership team on this new joint venture, which brings together two leading businesses that provide mission-critical solutions to a growing and attractive client base,” said Jim Neary, managing director at Warburg Pincus. “We see meaningful opportunity to further build this business into a leading platform in automotive and mortgage lending technology.”
Bret Leech, president of Fiserv Lending Solutions, will remain in his role.
“Fiserv is committed to delivering value for clients, and we expect this partnership with Warburg Pincus to further enhance service and innovation across the lending marketplace,” said Jeffery Yabuki, president and chief executive officer of Fiserv, in a statement. “In addition, we will continue to provide integration advantages to ensure that our collective clients get the best of both organizations to provide differentiated value for our clients, associates and shareholders.”
Fiserv is scheduled to release the results of its fourth quarter of 2017 later today.