Home Capital Group Inc. has reached a deal for its payment processing and prepaid card business, including its Payment Services Interactive Gateway, or PSiGate, units.
The Toronto-based lender's sale agreement with a third party is expected to complete within 2017. Exiting the business is projected to bring approximately C$20 million in annual cost-saves and a decrease of C$18 million in fees and other income. Home Capital will continue providing services for some of the divested businesses' clients for up to a year after deal completion.
Deal-related costs and the hit to net income are not expected to be significant.
Raymond James acted as Home Capital's financial adviser.