Private equity firms continue to see auto financing as an excellent option to leverage.
In recent weeks, Bain Capital Ventures injected $55 million into defi SOLUTIONS, and Fair secured a round of strategic equity funding that is led by Siemens-backed next47 global venture fund and also includes BMW, CreditEase FinTech Investment Fund, Millennium Technology Value Partners, 137 Ventures, G Squared and Upfront Ventures.
Then last week, Fiserv, a global provider of financial services technology solutions, announced it has entered into a definitive agreement with Warburg Pincus, a global private equity firm focused on growth investing, pursuant to which funds affiliated with Warburg Pincus will acquire a 55 percent share of the Lending Solutions business of Fiserv.
Fiserv said it will receive approximately $395 million in net after-tax proceeds and retain a 45 percent equity interest in the business.
The transaction, which is subject to customary closing conditions, is targeted to close in the first quarter.
The companies highlighted the joint venture will include all of the automotive loan origination and servicing products and related operations of Fiserv, as well as its LoanServ mortgage and consumer loan servicing platform. Fiserv will retain its Secure Lending product for e-contracting and its UniFi mortgage origination solution.
Executives continued that the new venture is also expected to create value for current and future Fiserv clients by partnering closely with Fiserv for seamless delivery of account processing, integrated billing and payments and LoanComplete solutions, and through Warburg Pincus’ demonstrated expertise and track record in growing financial technology businesses of scale.
The business will continue to be led by Bret Leech, current president of Fiserv Lending Solutions, and focus on delivering a market-leading lending experience through innovative, borrower-centric technology and processing solutions.
“Fiserv is committed to delivering value for clients, and we expect this partnership with Warburg Pincus to further enhance service and innovation across the lending marketplace,” said Jeffery Yabuki, president and chief executive officer of Fiserv.
“In addition, we will continue to provide integration advantages to ensure that our collective clients get the best of both organizations to provide differentiated value for our clients, associates and shareholders,” Yabuki continued.
The Fiserv Lending Solutions business is a participant in automotive lending origination technology, automotive lending servicing technology and process solutions, as well as comprehensive mortgage and consumer loan servicing solutions.
“We are pleased to partner with Fiserv and the Lending Solutions leadership team on this new joint venture, which brings together two leading businesses that provide mission-critical solutions to a growing and attractive client base,” said Jim Neary, managing director at Warburg Pincus.
“We see meaningful opportunity to further build this business into a leading platform in automotive and mortgage lending technology,” Neary went on to say.
Warburg Pincus brings more than four decades of growth focused investing in financial services and deep experience in advancing technology products and platforms that serve a diverse range of consumer lending needs across multiple business channels.
Leech added, “We look forward to collaborating with Warburg Pincus to build on our combined vision of lending technology excellence to better serve the evolving needs of our clients and their customers.”