Private Equity Fund Buys Controlling Stake in Metavante

MILWAUKEE – Marshall & Ilsley Corp. announced a ‘sponsored spin-off’ of its wholly owned Metavante unit, in which private equity fund Warburg Pincus will pay $625 million for a 25% stake–controlling interest under securities law–in Metavante, the provider of electronic funds services, processing and bill payment service for thousands of credit unions and banks. Marshall & Ilsley shareholders will own the remaining 75% of Metavante in a tax-free distribution of shares. The deal is similar to a 2005 sponsored spin off of Fidelity National Title’s spin-off of its credit union and bank outsourcing operations, in which private equity fund Texas Pacific Group paid $500 million for a 25% stake in the spin-off, known as Fidelity National Information Services. Metavante, itself is the conglomeration of a number of back-office service providers, including the NYCE EFT network, Advanced Financial Solutions, NuEdge Systems, Response Data and Kirchman Corp., and is the owner of one of four competing electronic image/check networks, known as Endpoint Exchange. After the spin off, Frank Martire, the former Fiserv executive who now heads Metavante, will continue as CEO of the newly public entity. Marshall & Ilsley is a 150-year-old midwest regional bank holding company with almost $57 billion in assets.