Fiserv explores investment unit divest, sources say

20 August 2019

Fiserv is working with Citigroup to shop its investment services business, said two sources familiar with the situation.

The divestiture comes as the Brookfield, Wisconsin-based financial software company increasingly focuses on the payments industry following the closing of its USD 38bn acquisition of First Data last month.

Fiserv’s non-core investment services unit, which includes the Unified Wealth Platform product, generates around USD 80m in EBITDA, the two sources said. The sale process for the unit is at an early stage, these sources said. The process is primarily geared towards financial sponsors, the first source added.

The unit could fetch a valuation at around a 10x multiple of EBITDA, the second source said. Fiserv has been under-investing in the platform and a new owner could focus on expanding the business, this source added.

Broker-dealers and investment advisors use Fiserv’s wealth management software for real-time portfolio management, trading, and reporting for retail investor clients. Fiserv unveiled the United Wealth Management product in October 2011, and appointed Cheryl Nash to lead the investment services group as its president a month later.

Logical strategic suitors for the unit include Envestnet, AssetMark and Broadridge Financial Solutions, the second source added.

Broadridge announced three acquisitions in wealth management technology earlier this year. In June, it acquired Canadian wealth tech company RPM Technologies. In May, it acquired Rockall, a provider of collateral management technology. In April, it acquired the custody and trust assets of retirement plans from TD Ameritrade Trust Company.

Fiserv and Citi declined to comment.