Fifth Third Bancorp Spins Off Majority Of Processing Unit

Published March 30, 2009, 5:53 p.m. EDT

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Updated August 27, 2020, 12:45 a.m. EDT

1 Min Read

CINCINNATI – Fifth Third Bancorp announced yesterday it has agreed to seel a 51% stake in its Fifth Third Processing unit, popular with credit unions, to private equity fund Advent International Inc., for $561 million.

Processing Content

Fifth Third will retain a 49% stake in the new company, which will be capitalized by senior secured notes totaling $1.25 billion. Fifth Third will also receive warrants from the new entity.

The move follows a $3.4 billion injection late last year from the government into Fifth Third. The deal announced Monday is expected to boost the regional bank's tangible common equity and Tier 1 capital by about $1.2 billion; both are common measures that attempt to estimate a bank's financial health.

Advent, whose North America headquarters is based in Boston, is a global buyout firm with offices in 15 countries.

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