Swedish investment organisation EQT is reportedly considering the sale of its majority stake in Banking Circle, a cross-border payment processing firm, in a deal that would value the latter at over $2bn.
Reuters reported that EQT is collaborating with investment bankers at Morgan Stanley. The investment bankers have recently been informally approaching potential buyers, including payments and financial technology firms, as well as other private equity firms, citing undisclosed sources privy to the matter.
The news agency also said that the divestiture is not guaranteed.
Initially established in 2013 as a payments subsidiary of Denmark’s Saxo Bank, the payment processing firm was relaunched as Saxo Payments Banking Circle in 2016.
In 2018, EQT, through its EQT VIII fund and EQT Ventures fund, together with payment company founders and other co-investors acquired Banking Circle for an undisclosed sum.
Banking Circle offers advanced mission-critical infrastructure for cross-border payment processing, designed to simplify operations and reduce time and costs.
By leveraging direct clearing access through prominent partner banks, the company serves the growing online payment processing provider market. The firm employs around 150 personnel.
Banking Circle secured a European banking licence in Luxembourg in 2019. The company’s clients include financial institutions and marketplaces such as Stripe, Nuvei, PPRO, Alibaba, Paysafe, Checkout.com and Paymentsense.
According to Reuters, the cross-border payment processing firm generates around $400m in annual revenue and $80m in earnings before interest, tax, depreciation, and amortisation (EBITDA).
In similar vein, another payment processing company Nuvei, agreed to its acquisition by US-based private equity investor Advent International in April this year. The deal valued the Canadian company at around $6.3bn.
After two months, the publicly-listed company also secured shareholder approval for the deal. Its subordinate voting and multiple voting shareholders cast 99.24% votes supporting the transaction under section 192 of the Canada Business Corporations Act.
