Buyout firm EQT is mulling a $2 billion sale of Banking Circle, sources say By Reuters

By Milana Vinn, Amy-Jo Crowley and David French

(Reuters) – Private equity firm EQT ( ST: ) is mulling a sale of its majority stake in Banking Circle, hoping any deal would value the payments processor at more than $2 billion, including debt, several said persons familiar with the matter.

EQT is working on the plan with investment bankers at Morgan Stanley, who in recent weeks have been informally scouting potential buyers, including payments and financial technology companies as well as other buyout firms, the sources said.

The sources cautioned that no sale is guaranteed and spoke on condition of anonymity to discuss confidential information.

EQT and Morgan Stanley declined to comment. Banking Circle did not respond to a request for comment.

Banking Circle helps facilitate cross-border payments through its technology platform and correspondent banking network and counts the e-commerce giant Alibaba (NYSE: ) and other payments firms Stripe and Paysafe among its customers.

The Luxembourg-based company also holds a banking license in Europe, setting it apart from many other payments companies, which have tried to avoid the strict regulatory oversight that comes with it. Last year, it obtained a license to be an uninsured commercial bank in Connecticut as part of efforts to expand in the United States.

Banking Circle generates about $400 million in revenue and $80 million in earnings before interest, taxes, depreciation and amortization (EBITDA) annually, according to four of the sources.

The business was originally founded in 2013 as the payments subsidiary of Saxo Bank in Denmark and was relaunched as Saxo Payments Banking Circle in 2016 before dropping the Saxo reference a year later.

EQT bought a majority stake in Banking Circle for an undisclosed price in 2018. Banking Circle’s founding staff own the rest of the company.

While valuations of payments companies have cooled somewhat since the boom at the start of the decade, both industry players and investment firms retain significant interest in such companies, given that digital transactions make up a increasingly from money movements.

Nuvei, another Banking Circle client, agreed in April to be bought by investment firm Advent International in a $6.3 billion deal that will take it private.