Apax Close to Acquiring Finastra Treasury and Cap Markets Unit, Lines Up Bank Financing 

Private equity firm Apax Partners is in pole position to acquire U.K.-based Finastra’s treasury and capital markets, or TCM, unit in a carve-out deal worth about $2 billion, according to sources.

The private equity firm has lined up a roughly $1 billion-equivalent debt financing package from banks after considering funding from both the public and private markets to back the potential buyout, said one of the sources. The firm was aiming to raise leveraged loans at the start of the process, the source added.

Sell-side advisor Evercore held a lender education with both banks and direct lenders attending after distributing process materials in March, Octus, formerly Reorg, reported.

The debt financing is expected to include a mix of currencies, such as U.S. dollars, sterling and euros, as the TCM unit of Finastra is predominantly a European business, with its headquarters in the United Kingdom, but it also operates in the United States.

While the tech industry has been somewhat protected from tariff concerns, the current volatile market conditions are likely to have the buyer and banks wait until the market conditions improve before launching syndication.

The TCM business, a division of the U.K. financial technology company Finastra, generates about $200 million EBITDA. Evercore is acting as a sell-side advisor to Finastra’s owner, Vista Equity Partners, as reported.

London-based Finastra was created in 2017 by Vista Equity Partners, which took Canadian payments technology provider D+H Corp private in a 4.8 billion Canadian dollars ($3.5 billion) deal and then merged it with Misys, a banking and capital markets software business that it already owned.

The TCM arm provides software for financial institutions that supports organizations in processing trades and managing risk and compliance. Octus reported in April that Apax Partners was among the bidders advancing into the second round to acquire the division.

Vista Equity Partners is exploring a refinancing for the wider Finastra group with both direct lending and syndicated solutions under consideration, as reported. In September 2023, the U.K. fintech secured a groundbreaking $5.3 billion debt package to refinance its syndicated first and second lien debt, as reported.

Apax Partners, Vista Equity Partners and Evercore declined to comment.