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FIS to sell majority interest in Capco to CD&R

FIS is to sell its majority ownership stake in Capco to Clayton, Dubilier & Rice (CD&R), establishing Capco as an independent company.

FIS will sell approximately 60 per cent equity interest in its Capco business to CD&R funds and receive net cash proceeds of USD477 million.
Upon closing, FIS will also retain approximately 40 per cent equity interest in the business.
The transaction, which includes other consulting-related assets, is expected to close by early third quarter, subject to required regulatory approvals and customary closing conditions.
Capco, the public brand for FIS’ management consulting offering, is a global consulting organisation specialising in business, digital and technology consulting services for the financial services industry. Upon closing, Capco will become a privately held company operating under the Capco name.
CD&R operating partner Russ Fradin, the former chief executive officer of SunGard, will serve as chairman of the independent Capco company. Lance Levy will continue to serve as Capco CEO.
“CD&R’s investment will enhance Capco’s ability to grow and expand its market offerings while maintaining its market leading transformation services,” says Gary Norcross, president and chief executive officer, FIS. “FIS’ ongoing minority ownership enables our clients to continue to benefit from the relationship, while we focus investment on our IP-led solutions.”
“We are pleased to be partnering with FIS and to support and invest in Capco as a dynamic and highly-respected independent enterprise,” says Fradin. “Capco’s many underlying strengths, which include a highly skilled team of consultants, a passion for problem solving and delivering value to clients, and a reputation for exceptional service, provide a solid foundation for continued success.” 
“As an independent enterprise, we will remain laser focused on delivering the highest levels of service and value to our clients,” says Levy (pictured). “CD&R’s investment and support is a big win for us – they will accelerate the expansion of our market offerings and coverage, and will provide Capco access to business insights and skills to drive the next phase of our growth.”
FIS expected the consulting business to contribute USD0.11 to USD0.12 to second half 2017 adjusted EPS and anticipates cash proceeds, net of taxes and deal-related expenses, of approximately USD445 million.
Centerview Partners acted as financial adviser to FIS. Willkie Farr & Gallagher served as FIS’ legal advisers in the transaction.
CD&R has obtained committed financing from Barclays; Credit Suisse; BMO Capital Markets; HSBC Securities (USA) and HSBC Bank USA, National Association; and Natixis, New York Branch.
Barclays, BMO Capital Markets, Credit Suisse, HSBC Securities (USA) and Peter J. Solomon Company, an affiliate of Natixis, acted as financial advisers to CD&R. Debevoise & Plimpton served as CD&R’s legal adviser in the transaction.

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