Bank Financial, a credit card processing company, has acquired the first $1 billion of equity from a private equity firm to be sold by its parent company.
The purchase is expected to close next week.
Bank Financial said it will sell $1,500 million of Bank Equity as part of the deal, which is expected be valued at more than $2 billion.
Bank Equity has a combined market capitalization of more than US$1.5 billion, according to the New York Stock Exchange.
“This acquisition will provide Bank with more than three times the cash flow of Bank Finance Corp., which was acquired in November 2018 for a combined $8.6 billion,” Bank Financial CEO and founder Michael T. Miller said in a statement.
Bank Finance is a privately held company focused on the retail and consumer finance market, including credit cards, prepaid cards and personal loans.
Bank Securities, a commercial real estate investment trust, acquired Bank Financial in October 2018 for US$6.5 million.
Bank’s stock has climbed about 10% this year, but the deal is the latest in a series of transactions by Bank Financial that have raised questions about the viability of the bank.
Bank shares have gained as much as 18% in 2017, compared with a 0.7% rise for the S&P 500 index.
The company is in the process of exiting private equity after two rounds of financing in late 2019 and early 2020, said Michael Zavagni, Bank Finance’s chief executive.
Bank recently completed a $400 million buyout of its banking business.
The acquisition of Bank Securities and Bank Finance will allow Bank to focus on the growing number of businesses it serves.
Bank currently employs about 10,000 people worldwide.
Bank has about 2,000 employees.
It operates in more than 60 countries, including Canada, the United Kingdom, Germany, Ireland, the Netherlands, Japan, Russia, China and South Korea.
“Bank is building an organization that will be able to offer better value to its customers,” Miller said.
“It is going to be a company that will operate and scale across many different markets, including China, Europe, Latin America and the U.S. We believe this acquisition will benefit all of us.”
Bank has seen its share price decline in recent years amid a series on the bank’s operations, including a series by the New Yorker magazine that revealed the financial practices of the institution.
The bank has also seen its stock plummet after the Federal Reserve imposed limits on lending to financial institutions, as well as after the Trump administration imposed restrictions on banks.
The financial crisis has hurt the bank, which has seen revenue shrink and revenue from consumer loans fall.
Bank reported $10.2 billion in revenue in its fiscal third quarter, down from $11.3 billion in the same period a year earlier.
The New Yorker reported that the company has also been caught in the crossfire of regulators trying to crack down on the lender.
The magazine found that the bank has been the subject of a series that has led to lawsuits by investors who say they have been defrauded.
Bank also has come under scrutiny in recent months after a series in the New Republic that highlighted the bank as being among the biggest lenders to the U-S.S., which is used as a conduit for narcotics and terrorist financing.
The newspaper also uncovered an internal bank review that revealed that the Bank was understaffed, under-funded and under-resourced.
The report, titled “Bank’s Financial Culture Is ‘Criminal,'” was published in the magazine in December 2018.
The article noted that the report also found that Bank has “been too slow to adapt to new technology and has been slow to change its culture.”
Bank was one of several financial institutions that sued the Trump Administration over its regulatory rollbacks, which have affected some of the largest banks in the country.
Bank CEO and chairman Steven R. Cohen, who resigned in September, said in November that the U:s actions were designed to protect the public interest, protect the bank and protect the banking system.
Bank and other financial institutions were hit hard by the administration’s crackdown on the financial sector.
Bank, which provides financial services to a wide range of companies, has been targeted by the federal government in the past, including by the Treasury Department and the Securities and Exchange Commission.