Exclusive: Vista Equity's Finastra explores $7 bln banking unit sale -sources

Feb 14 (Reuters) - Finastra, a financial technology company owned by buyout firm Vista Equity Partners, is exploring a sale of its banking unit for as much as $7 billion, five people familiar with the matter said on Tuesday.

The London-based company is in the process of carving out the business known as universal banking, which provides software to banks and credit unions to run core processes, as it prepares to kick off a sale process in the coming weeks, the sources said.

Finastra is working with a financial adviser as it explores options for the business, which currently generates about $1.7 billion in revenue and roughly $500 million of earnings before interest, tax, depreciation and amortization, the sources said.

Potential buyers of the universal banking unit include other private equity firms, as well as rivals in the financial software space, the sources said.

The sources, who requested anonymity because the matter is confidential, cautioned that the discussions are at an early stage and that no deal is guaranteed.

Finastra and Vista did not respond to requests for comment.

Vista has been an active player in the financial technology industry in recent years. Last August, it agreed to take tax automation platform Avalara Inc private in a deal worth $8.4 billion, while in January, it announced it would buy insurance-focused Duck Creek Technologies for $2.6 billion.

Finastra was created in 2017 by Vista, which took Canadian payments technology provider D+H Corp private in a C$4.8 billion ($3.6 billion) deal and then merged it with Misys, a banking and capital markets software business that it already owned.

Finastra and its owner have previously explored options for other parts of its business. In 2021, Finastra unsuccessfully tried to sell its capital markets business, the sources said.

($1 = 1.3452 Canadian dollars)

Reporting by Amy-Jo Crowley and Andres Gonzalez in London and David French in New York; Editing by Anirban Sen and Sharon Singleton

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