RBC & BMO sell Moneris to Francisco Partners for USD $2bn

RBC and BMO have agreed to sell Moneris to Francisco Partners for about $2 billion in cash, with RBC set to receive 50% of the proceeds.

The deal will transfer ownership of one of Canada's largest payment processing and commerce businesses to the technology investment firm. The two banks will retain commercial ties through new exclusive long-term customer referral arrangements with Moneris once the transaction closes.

Created 25 years ago, Moneris has grown into a major provider of payment and commerce services for Canadian merchants. It supports more than 325,000 points of commerce across the country, offering payment acceptance and management tools tailored to the Canadian market.

Under the agreement, RBC and BMO will sell their jointly owned stakes in the business. After the sale closes, they will continue working with Moneris by referring new and existing business clients through exclusive long-term arrangements.

Deal terms

For RBC, the transaction is expected to result in an after-tax gain of about $475 million, or $560 million on a pre-tax basis. The disposal should have a marginally positive effect on its common equity Tier 1 ratio when the sale closes, with no significant effect expected on future run-rate earnings.

No comparable financial impact for BMO was disclosed. The transaction remains subject to customary closing conditions, including regulatory approvals.

Francisco Partners specialises in technology investments and has existing interests in payments, commerce gateways and point-of-sale businesses. The acquisition gives it a direct presence in the Canadian payments market, where Moneris has long held a significant position among small, medium-sized and large merchants.

The sale also reflects a common model in financial services, in which banks seek to preserve customer relationships even after exiting direct ownership of a payments platform. By keeping referral agreements in place, RBC and BMO can continue connecting their business customers with Moneris products without remaining shareholders.

Payments market

Moneris has been a prominent name in Canadian merchant acquiring and payment processing since the two banks established it. Over that time, the sector has expanded beyond card acceptance to broader commerce software, integrated checkouts and point-of-sale systems that combine in-store and digital transactions.

That shift has attracted private equity and specialist technology investors seeking assets with recurring transaction revenue and room for software expansion. Francisco Partners' purchase of Moneris places another established payments business under the control of an investment firm focused on software and financial technology.

Sean Amato-Gauci, Group Head, Commercial Banking, RBC, described Moneris as an important part of the Canadian business landscape and said Francisco Partners would help drive its next phase of growth.

"Moneris has played a central role in enabling Canadian businesses to modernise and scale by connecting them with more consumers more often through innovative payments solutions across the commerce ecosystem," said Sean Amato-Gauci, Group Head, Commercial Banking, RBC.

"The trusted team, leading platforms and unwavering commitment to clients that Moneris is known for will be leveraged and amplified by Francisco Partners in this next stage of growth. We're eager to see the accelerated investment in innovation and modernized solutions Moneris will bring to our valued business clients and the Canadian market," said Amato-Gauci.

The transaction underscores the continuing value of established payments infrastructure in Canada, particularly businesses with broad merchant networks and long-standing banking relationships. With more than 325,000 points of commerce, Moneris is one of the larger platforms in the country's merchant services market.

For RBC, the sale will release capital and generate a one-off accounting gain while preserving a channel to business customers that use payment acceptance services. For Francisco Partners, it offers access to a large installed base of Canadian merchants through a business with national scale and established ties to two of the country's largest banks.