UK-based private equity firm Pollen Street Capital announced Friday that it has agreed to purchase the Universal Banking division, the global core banking software business belonging to financial software company Finastra. Neither company disclosed the financial terms of the transaction.
The Universal Banking unit offers a range of services to financial institutions, including account and deposit management, payments, lending, and treasury operations. Following the completion of the deal, the division will function as a standalone business and continue to be led by its current management team.
Reuters had previously reported in September that Finastra was looking into selling its Middle Eastern and Asian core banking operations in a deal that analysts suggested could exceed $1 billion in value.
In a separate transaction, Finastra sold its Treasury and Capital Markets division to Apax Partners last year. According to rating agency Fitch, the proceeds from that sale were used to fully pay off the company’s debt and speed up dividend payments.
Finastra itself was formed in 2017 after U.S. private equity firm Vista Equity Partners took Canadian payments technology provider D+H Corp private in a C$4.8 billion ($3.5 billion) deal and combined it with Misys, a banking software company Vista already had in its portfolio.
The purchase aligns with Pollen Street’s focus on investing in specialized financial services and technology companies. The deal also reflects a broader trend of private equity firms targeting UK-based businesses, which have attracted increased interest due to their comparatively lower market valuations.
