Barclays and private equity firm Brookfield Asset Management partnered to grow Barclays’ payment acceptance business and transform it into a standalone entity.
The partnership brings together Barclays’ client relationships and payments experience in the United Kingdom and Brookfield’s expertise in payments, technology, operational transformation and corporate carve-outs, the companies said in a Thursday (April 17) press release.
Together, the companies will focus on expanding the payment acceptance business’ range of services, enhancing the client experience it delivers and improving its financial performance, according to the release.
Barclays plans to invest about 400 million pounds (about $530 million) in the business, primarily during the first three years of the partnership, while Brookfield will provide its expertise to help transform the business and will earn a financial incentive linked to the performance of the business, the release said.
Between the third year and seventh year of the partnership, Brookfield may acquire a 70% ownership interest in the business, with Barclays recovering its full investment, per the release.
Upon the sale of the business by Barclays, Brookfield’s financial incentive will convert into another 10% ownership interest in the business so that Brookfield will own an 80% share, according to the release. Barclays expects to retain a 20% stake in the business.
The business will continue to use the “Barclaycard Payments” brand and will be the sole payment acceptance provider to Barclays’ clients for at least 10 years, per the release.
It was reported Tuesday (April 15) that Barclays was in advanced talks to sell a stake in its payments business to Brookfield.
Barclays has been shedding non-core businesses — including its German consumer finance division and a portfolio of Italian mortgages — and many of its European rivals have been doing the same.
In the Thursday press release, Matt Hammerstein, CEO of Barclays U.K. Corporate Bank, said the plan “demonstrates clear execution of our three-year plan to become a simpler, better and more balanced bank.”
Brookfield said in a February 2024 press release that it committed $5 billion of investments within the technology-enabled payments space, including its acquisitions of Network International and Magnati.
Ron Kalifa, vice chair and head of financial infrastructure at Brookfield, said in the Thursday press release that the partnership with Barclays will “deliver the operational transformation required to create the market leader, well-positioned to drive the growth of the U.K.’s digital economy with innovative and integrated payment solutions.”
