Key Takeaways
- • Blackstone and Warburg Pincus are exploring a sale of IntraFi that could value the US financial technology company at more than $10bn, according to Reuters.
- • Morgan Stanley and Guggenheim Securities have reportedly been appointed to advise on a potential transaction, which remains at an early stage; the owners could ultimately retain the business.
- • IntraFi generates approximately $630m in annual EBITDA, according to Reuters' sources, implying a valuation of roughly 16x EBITDA at the reported $10bn level.
- • Blackstone acquired the company, formerly Promontory Interfinancial Network, in 2019 from investors including Bank of New York Mellon; Warburg Pincus invested in 2022.
- • The potential sale reflects private equity sponsors seeking to capitalise on improving exit conditions, alongside Warburg Pincus's recent sales of McGill and Partners and WildFire Energy.
Summary
IntraFi operates one of the largest reciprocal deposit networks in the US. The platform allows banks to distribute customer deposits across multiple institutions, extending federal deposit insurance coverage beyond the standard $250,000 limit. It also enables banks to trade deposits, earning transaction fees by connecting institutions with surplus deposits to those seeking additional funding. According to Reuters' sources, the company generates approximately $630m in annual EBITDA.
Blackstone acquired the company, then known as Promontory Interfinancial Network, in 2019 from investors including Bank of New York Mellon. Warburg Pincus subsequently invested in the business in 2022, making the potential disposal a test of current valuation appetite for a deposit-network asset with two sponsor owners.
The reported sale exploration comes as private equity firms seek to capitalise on improving exit conditions. Warburg Pincus recently agreed to sell insurance broker McGill and Partners and energy producer WildFire Energy. Blackstone agreed earlier this month to sell Clarion Events to Informa for approximately £2.2bn.
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