The payments company has hired Goldman Sachs to advise on the process, four people familiar with the situation said. Evertec has reached out to prospective buyers, one of the sources said. It’s unclear when first-round bids are due.

The San Juan, P.R.-based company offers merchant acquiring and payments in 26 countries throughout Latin America. It processes roughly two billion transactions a year, according to the company website. Evertec employs more than 2,300 people.

In August, Evertec reported second-quarter adjusted earnings of 38 cents a share, above consensus estimates of 35 cents, according to George Mihalos, a Cowen senior analyst. Revenue in the second quarter dropped 3.8% to $118 million, which was still above the $110 million consensus estimates, Mihalos said in a note. Seventy-nine percent of Evertec’s revenue is sourced from Puerto Rico, he said.

In August, Bloomberg reported that Evertec was weighing strategic options, including a sale. Evertec could appeal to larger payments companies like Global Payments  or Fiserv , Bloomberg said. Evertec President and CEO Morgan “Mac” Schuessler is the former president of international at Global Payments.

The Evertec sale comes after a wave of consolidation among large payments companies. In 2019, several big payments companies merged. This included Fidelity National Information Services’s (FIS) $34 billion purchase of WorldPay, while Fiserv scooped up First Data for $22 billion. In addition, Global Payments bought TSYS for $21.5 billion last year. The consolidation trend was expected to continue in 2020, but the Covid-19 pandemic put mergers on hold.

Evertec isn’t expected to attract large payments companies, banking sources said, pointing to the company’s overexposure to the Puerto Rican market.

Evertec is more a provider of bank systems services, including ATM management and digital banking, one banker said. Business solutions, which include core bank processing and network management services, comprise 43% of Evertec’s business, while payment services are 38% and merchant acquiring is 19%, according to Evertec’s second-quarter investor presentation. Evertec was once part of Banco Popular, which sold a 51% stake in the company to Apollo Global Management (APO) in 2010. Evertec went public in 2013, raising $506 million.

Private equity, which has largely not been investing during the Covid-19 pandemic, may be interested. Several PE firms such as Blackstone Group , KKR , Hellman & Friedman, and GTCR are noted fintech and payments investors. Evertec has also been owned by private equity before. It’s unclear what price the company, which has a $2.45 billion market cap, would fetch. Evertec’s shares have rebounded since hitting a low of $20.28 in March and closed Thursday at $34.11.

Source: Barons

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