Shares of Fiserv, Brookfield, Wis., at last check were up 1.6% at $116.09.
ValueAct believes Fiserv's Clover credit-card processing business could be valued at $185 billion by 2024., Bloomberg reported, citing an investor presentation.
Neither ValueAct nor Fiserv immediately responded to a request for comment.
The company believes Clover's business is already bigger than that of Twitter (TWTR) - Get Twitter, Inc. Report-backed rival Square (SQ) - Get Square, Inc. Class A Report and isi growing faster, the presentation shows.
ValueAct said it believed Clover could be valued at $30 billion to $45 billion including debt on a stand-alone basis, approaching nearly half of Fiserv’s $96 billion enterprise value.
"At this point in the cycle, we believe there is more money to be made investing behind incumbents transforming themselves than there is betting on disruptors,” ValueAct said in the presentation. “Fiserv checks all our boxes as a digital transformation candidate.”
The company said it viewed Fiserv as cheaper, faster-growing and higher-quality than the median S&P 500 company, even excluding Clover.
ValueAct sees room to accelerate Clover’s growth and profitability, as well as add value by simplifying Fiserv’s strategic focus and communication.
Last month, Fiserv reported second-quarter earnings that topped analysts' estimates. Clover posted 96% growth in gross payment volume during the quarter.
Fiserv recently released Clover Station Solo, a point-of-sale service for full-service restaurants that provides tools to manage front-of-house tasks, payments, online ordering, and employee scheduling.
ValueAct was founded in 2000 and has about $16 billion of assets under management