Popular Inc. sells all shares in Evertec for $220M
Popular Inc. announced the sale of all its remaining stock in Evertec Inc., for $219.8 million, through a combination of public and private offerings.
Banco Popular de Puerto Rico’s parent company completed the sale of its remaining 7,065,634 shares of common stock of Evertec, of which 6,262,293 shares were sold in an underwritten public offering, while the remaining 803,341 were sold through a private sale to Evertec.
Popular received some $219.8 million from the combined transactions, which resulted in an after-tax gain of approximately $131 million. Popular announced it intends to return to shareholders, via common stock repurchases, the after-tax gains resulting from the sale of the shares.
Following the sale of the shares, Popular will no longer own any Evertec common stock.
The stock sale responds to a transaction completed earlier this year through which Popular bought certain assets and assumed certain liabilities from Evertec, including its retail and business digital banking and commercial cash management applications.
As part of the deal, Evertec extended service agreements with Popular and its subsidiaries, with the longest extension running through the year 2035, Evertec’s CFO Joaquín Castrillo explained.
“Part of the negotiation called for Popular to reduce its investment or voting interest in Evertec down to at least 4.5% because of regulatory implications, which placed hurdles on Evertec’s expansion plans,” he said. “Now Popular has no participation in Evertec.”
Popular’s stock divestiture frees Evertec from having to get approval from banking regulators every time it wants to buy another property, he explained.
Popular’s relationship with Evertec dates back nearly 25 years, when the latter began operating as part of Banco Popular de Puerto Rico.
J.P. Morgan Securities LLC acted as sole book-running manager, BofA Securities, Goldman Sachs & Co. LLC and Morgan Stanley acted as lead managers and Hovde Group, LLC, Keefe, Bruyette & Woods, A Stifel Company, Piper Sandler and PNC Capital Markets LLC acted as co-managers for the underwritten public offering.
