Royal Bank of Canada and Bank of Montreal are selling payment processor Moneris Solutions Corp. to San Francisco-based investment firm Francisco Partners for $2 billion.

Once the sale of the company that helps businesses accept card and digital payments is completed, RBC expects to earn about $475 million after tax, while BMO will gain approximately $600 million. Neither bank expects the sale to have a significant impact on future earnings.

“We view this transaction as incrementally positive for both banks, crystallizing value from a non-core asset, adding capital to the war chest,” Matthew Lee, an analyst at Canaccord Genuity Corp., said in a note on Monday. “It fits the broader sector trend of banks simplifying their balance sheets and monetizing non-core holdings to redeploy capital.”

Canada’s big banks regularly sell businesses or operations that they no longer consider as part of their core business. For example, BMO in May said that it was selling a majority interest in its transportation and finance lending businesses.

Moneris was created as a joint venture between RBC and BMO in 2000 and now helps 325,000 businesses and sales locations accept payments, representing one in three transactions in Canada.

“Moneris has played a central role in enabling Canadian businesses to modernize and scale by connecting them with more consumers, Sean Amato-Gauci, RBC’s group head of commercial banking said in a statement on Monday.

The deal will allow Moneris to grow further, Moneris chief executive James Hick said, because Francisco Partners has a track record for growing technology-based businesses, as evidenced by its investments in companies such as Hypercom Corp., Paymetric Inc., PayLease LLC and Verifone Inc.

  • Canada’s biggest banks are in a ‘sweet spot,’ but questions remain over how long it will last
  • RBC’s McKay says he’s using AI every day to help reshape how he runs the bank

Francisco Partners sees a significant opportunity for long-term growth with Moneris “while preserving the deeply Canadian identity,” Peter Christodoulo, who is a partner at the company, said in a statement.

The deal is expected to close by the end of the first quarter of 2027. Despite selling the company, both RBC and BMO will continue to partner with Moneris in the form of exclusive, long-term referral arrangements.

• Email: nkarim@postmedia.com