(Fixes valuation of WorldPay unit to show $1 billion, not $1
* TransFirst hoped for $1.3 bln to $1.5 bln in sale
* Low offers scuttle deal -sources
By Greg Roumeliotis and Luisa Beltran
NEW YORK, Nov 15 Buyout firm Welsh, Carson,
Anderson & Stowe has ended talks on the sale of payment
processing company TransFirst to pursue a dividend
recapitalization, as potential buyers held out for combining it
with a unit of private equity-owned peer WorldPay, sources said.
Welsh Carson had hired investment boutique Financial
Technology Partners to explore a sale of TransFirst, hoping to
fetch between $1.3 billion and $1.5 billion in a sale, people
familiar with the matter told Reuters in September.
But following offers that fell short of expectations,
TransFirst decided not to pursue a sale for now, the sources
said on Thursday.
TransFirst has asked Bank of America Merrill Lynch
to arrange a loan of yet unspecified size to refinance existing
debt, redeem a portion of the sponsor's preferred equity and
fund a dividend, Thomson Reuters Loan Pricing Corporation
reported on Wednesday.
Hauppauge, New York-based TransFirst had held talks with
several private equity firms about a sale, including with CVC
Capital Partners Ltd, Permira Advisers LLP, Blackstone Group LP
and TPG Capital LP, one of the sources said.
Some buyers were also contemplating a combination of
TransFirst with the U.S. division of WorldPay, another
electronic payments processor, in order to capture higher market
share and increase profitability, one of the people added.
WorldPay, controlled by buyout firms Advent International
and Bain Capital LLC, hired JPMorgan Chase & Co to
explore a sale of its U.S. operations, a process that could
start in December or January and fetch as much as $1 billion,
two of the people said.
In the interim, TransFirst could see its debt rise by about
$250 million to around $650 million as a result of the dividend
recapitalization, the person added.
TransFirst, Financial Technology Partners, JPMorgan and the
private equity firms involved did not immediately respond to a
request for comment. WorldPay declined to comment.
TransFirst, one of the largest providers of secure payment
processing in the United States, handles about $30 billion in
annual transaction volume for more than 175,000 merchants and
financial institutions, according to its website.
Welsh Carson bought TransFirst for $683 million in 2007 from
buyout firm GTCR Golder Rauner LLC.
A smaller peer of TransFirst, First American Payment
Systems, controlled by private equity firm Lindsay Goldberg LLC,
had also been exploring a sale. The company could be valued at
between $700 million to $800 million, people familiar with the
matter told Reuters in September.
(Reporting by Greg Roumeliotis of Reuters News and Luisa
Beltran of peHUB; Editing by Leslie Gevirtz)