Private equity firm Blackstone Group is in talks to buy electronic payment processor Fidelity National Information Services (FIS), which would rank as the biggest leveraged buyout since the financial crisis, a source familiar with the situation said Thursday.
FIS's shares rose 16 percent to $30.27, giving it a market capitalization of more than $11 billion.
The company recently reported a rise in profits for the first quarter, with net income of $93.6 million, compared with $33 million a year ago.
FIS was not immediately available for a comment. Blackstone declined to comment.
Large leveraged buyouts have been pretty much extinct since the summer of 2007, when the financial crisis halted most financing for big deals, banks were left stuck with debt and the economy was on the verge of melting down. For an analysis: But conditions have turned around, with the economy recovering, stock markets rebounding and confidence returning to the banking sector.
Up until now, the multiple billions of dollars needed for big deals have remained elusive. That is changing. Bankers and private equity firms have started viewing mega-buyouts of $10 billion or more as achievable — something that was not even on the radar just six months ago.
It is a turnaround for a market that has not seen large deals since the end of the buyout boom when there were LBOs such as Blackstone's $26 billion deal to buy Hilton hotels and Kohlberg Kravis Roberts' $26 billion deal to buy payment processor First Data.
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