Business
Popular Enters into Agreement to Acquire Key Customer Channels; Renegotiates Existing Commercial Contracts with Evertec
SAN JUAN, Puerto Rico--(BUSINESS WIRE)-- Popular, Inc. (“Popular” or the “Corporation”) (NASDAQ: BPOP) announced today its entry, along with its wholly owned
About this update from Popular, Inc.
[{"type":"text","content":" SAN JUAN, Puerto Rico--(BUSINESS WIRE)--\nPopular, Inc. (“Popular” or the “Corporation”) (NASDAQ: BPOP) announced today its entry, along with its wholly owned subsidiary, Banco Popular de Puerto Rico (“BPPR”), into a definitive agreement with Evertec, Inc. (“Evertec”) and Evertec Group, LLC, a wholly owned subsidiary of Evertec, to acquire assets and assume liabilities used by Evertec to service certain BPPR channels. Popular expects the acquisition will accelerate the Corporation’s ongoing digital transformation and continue improving the experience of its clients.\n\nIn connection with the closing of the acquisition, Popular and BPPR will also amend and extend important service agreements pursuant to which Evertec provides, among other services, information technology and payment processing services. The amendments of these contracts will eliminate service exclusivities and are projected to reduce service costs as a result of discounted pricing and lowered caps on contractual pricing escalators tied to the Consumer Price Index. The amendments are also expected to improve Popular’s ability to meet its customer needs in a timely manner and increase optionality to develop and enhance technology platforms and select service vendors.\n\nIn addition, at the closing of the acquisition, BPPR also will amend and extend the agreement that governs its merchant acquiring relationship with Evertec. The new agreement will provide BPPR with revenue sharing, strengthening BPPR’s relationship with Evertec in payments.\n\nAt or after closing, Popular anticipates adding approximately 175 employees and contractors that support the servicing of the key channels, strengthening and deepening Popular’s in-house technology bench.\n\nThe total consideration to be paid for the transaction will be $196.6 million, to be paid by delivering 4,588,955 shares of Evertec common stock held by Popular and valued at $42.84 per share. After the completion of the transaction, Popular’s ownership stake in Evertec is expected to be approximately 10.5%. In connection with the transaction, Popular has also agreed to reduce its voting interest in Evertec below 4.5%, whether through selling shares of Evertec common stock or a conversion of such shares into non-voting preferred stock. Popular expects to sell down its stake in Evertec below 4.5% following the closing and ...