Payments processor TransFirst, which filed for an initial public offering in July, may be an acquisition target instead. Potential buyers include CVC Capital Partners and Total System Services, better known as TSYS, Bloomberg reported.
CVC reportedly approached TransFirst after its IPO filing, which prompted TransFirst to gauge interest from TSYS and other possible suitors, unnamed sources told Bloomberg. TransFirst's owner, private-equity firm Welsh Carson Anderson & Stowe, wants at least $1.6 billion in cash for the company, which could put it out of reach for TSYS.
A dual-track process of exploring both a sale and an IPO puts pressure on potential buyers to act before an IPO puts the company in the hands of public investors. Two recent payments IPOs were short-circuited by outright sales: Mercury Payment Systems was sold in May to Vantiv for $1.65 billion after an IPO filing, while Comdata was sold in August to FleetCor Technologies for $3.45 billion after following the same track.
TransFirst, which Welsh Carson acquired in 2007, processed more than $48 billion in payments for more than 200,000 businesses in 2013, according to its July IPO prospectus. Sources said Welsh Carson is expected to decide in the next several weeks whether to sell the company or follow through with the public offering.