Bain, Advent cancel sale of WorldPay’s U.S. unit

NEW YORK, Fri May 31, 2013 — WorldPay’s private equity owners, Bain Capital LLC and Advent International Corp, have canceled the auction of the payment processing firm’s U.S. unit, WorldPay told Reuters on Friday.
No potential buyer was willing to meet Bain’s and Advent’s price expectations of $800 million to $1 billion, sources familiar with the matter said.
The buyout firms bought 80 percent of WorldPay from Royal Bank of Scotland Group Plc in 2010 for about 2 billion pounds ($3 billion) and were looking to sell WorldPay’s U.S. assets to pay themselves a dividend and pay off debt.
Thomas H. Lee Partners LP, CVC Capital Partners Ltd. CVC.UL and Thoma Bravo LLC were among the private equity firms in discussions with WorldPay about a deal, the sources said.
Thomas H. Lee explored a partnership with iPayment, a New-York-based company that provides credit and debit card payment processing services to small businesses, in order to acquire WorldPay U.S., said the sources, speaking on condition of anonymity because details of the auction are confidential.
WorldPay U.S. has earnings before interest, taxes, depreciation and amortization of between $90 and $130 million, depending on how its business is accounted for, making its valuation contentious, the sources said.
“Following a strategic review of WorldPay U.S., we have concluded that the growth potential and value of the business will be maximized by remaining part of WorldPay Group,” WorldPay spokesman Simon Kutner told Reuters in an email on Friday. He declined to comment on details of the auction.
Bain, Advent, Thomas H. Lee Partners, Thoma Bravo and CVC declined to comment. An iPayment official did not respond to a request for comment.

 

Bain, Carlyle, Pamplona eye TI Automotive, sources report

DETROIT ― Bain Capital and Carlyle Group are among three private equity firms bidding for auto parts supplier TI Automotive in an auction that could fetch around $1.5 billion, those familiar with the matter said.

London-based buyout firm Pamplona Capital Management is also involved in the auction for TI Automotive, with final bids for the business expected sometime in October, these people said.

TI Automotive, which makes fuel tanks as well as braking and powertrain components for cars and trucks, has been exploring a sale of the company since early this year but the process has been slowed down by the volatility in the financing markets in recent months, the people said.

Financing remains relatively cheap for companies with strong credit ratings. But private equity deals typically need leveraged loans and high-yield bonds — the riskier form of lending that carries some of the highest interest rates and often is the first financing to be withdrawn when credit tightens.

Wall Street banks are becoming more selective about what financing deals they commit to or stiffening lending terms, making buyout deals like TI Automotive more costly for buyers and therefore limiting their ability to pay.

TI Automotive is expected to wait until markets recover before setting a final bid deadline sometime in October, two of the people said.

The company has estimated annual earnings before interest, tax, depreciation and amortization of around $250 million and its enterprise value is seen in the range of $1.4 billion to $1.6 billion, people familiar with the matter told Reuters previously.

TI Automotive, which is headquartered in the United States but chartered in Britain, swapped most of its debt to equity and slashed costs under the British equivalent of bankruptcy during the recession. After the debt-for-equity conversion completed under Chief Executive Bill Kozyra, the company is owned by a diverse group of shareholders led by hedge funds.

Representatives for TI Automotive were not immediately available for comment. Representatives for Bain, Carlyle and Pamplona declined to comment.

Carlyle, meanwhile, is also interested in another U.S. auto parts supplier Cooper Standard, which is also considering a sale of itself and competes with TI Automotive in the fluid system segment, one of the people said.

Reuters reported in August that Cooper Standard has hired JPMorgan Chase and Lazard Ltd. to look for a buyer more than a year after emerging from bankruptcy. The company later confirmed the sale process.

Cooper Standard, which makes body sealing systems and fluid handling systems for the automotive industry, has also attracted interest from private equity firms, people familiar with the matter said. The company is valued at more than $1.5 billion, the people said.

TI Automotive and Cooper Standard are the world’s two largest suppliers of systems that control, sense and deliver fluids and vapors in vehicles. But TI has greater exposure to the fast-growing Asian markets, drawing roughly a quarter of its revenue from China and other Asian markets.