FORTUNE — Yesterday’s big private equity news was that Chicago-based GTCR is paying more than $1.4 billion to acquire Premium Credit Ltd., a British provider of payment facilitation and financing services. Basically, it helps customers and businesses in the UK and Ireland pay insurance premiums in installments, rather than in a single annual payment.
The seller was Bank of America
, which acquired PCL as part of its $35 billion acquisition of credit card issuer MBNA in 2006.
A few notes, based on a conversation with someone familiar with the deal:
1. BoA and GTCR first began talking about PLC two years ago, with at least one other private equity firm also expressing interest. Then things tapered off, as BoA had some bigger fish to fry. Discussions between the two sides never really ended, and intensified over the summer.
2. At first glance, this looks like a giant price-tag for GTCR, which is investing out of a $3.25 billion fund. But my understanding is that the equity check is only for between $200 million and $300 million. That $1.4 billion figure includes not just leveraged financing, but also the value of funded receivables.
3. Overall, a very complicated transaction. GTCR first needed to transfer the funded receivables on BoA’s balance sheet onto a new balance sheet created to hold the assets. Then that new holding company needed to be funded by a securitization that involved 5 european banks, which then needed to be rated. Finally, GTCR needed to equitize the holding company, plus provide additional working capital. Plus the standard work that comes with an acquisition.
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