FIS breaks the bank with Worldpay $43 billion transaction

Fidelity National Information Services (FIS) has agreed to purchase global leading payment solutions provider Worldpay Inc for a reported $35 billion (debt not included) transaction, exemplifying the industry shift towards large scale consolidation.

The deal will be biggest takeover to date in the payments industry, which will see FIS assume Worldpay’s debt obligations – bringing the total value of the deal to $43bn. The takeover of Worldpay far surpasses the $22bn acquisition of First Data in January of this year in regards to monetary value.

The transaction will depend on the receipt of required regulatory and shareholder approvals and other customary closing conditions and is expected to close in the second half of 2019.

Gary Norcross will remain as chairman of the Board of Directors, President and CEO; meanwhile Worldpay CEO Charles Drucker will become executive vice chairman of the combined firm, which will retain the name FIS.

Norcross explained that “scale matters in our rapidly changing industry” and spoke of his excitement on the future of FIS.

He said: “Upon closing later this year, our two powerhouse organizations will combine forces to offer a customer-driven combination of scale, global presence and the industry’s broadest range of global financial solutions.

“As a combined organization, we will bring the most modern solutions targeted at the highest growth markets. The long-term value we will create for clients and for shareholders will set the bar in our industry and will create a range of new career opportunities for our employees.”

Following the takeover, FIS shareholders will have a 53 per cent stake in the combined company, while the remaining 47 per cent will be made up by Worldpay shareholders.

The newly merged company is expected to generate approximately $12.3 billion pro forma 2018 annual revenue, and will accelerate FIS’ organic revenue growth outlook from six percent to nine percent through to 2021.

“At Worldpay, our focus has always been on delivering more value to our clients and partners and making decisions that achieve our growth and performance objectives. Combining with FIS helps us accelerate the achievement of that, now benefiting from new scale and capabilities that will truly differentiate the company globally,” said Charles Drucker, executive chairman and chief executive officer, Worldpay.

“We are proud to become part of one of the financial services industry’s most respected and consistently performing companies, and I am excited about the new opportunities this brings both for the business and our colleagues worldwide.”

Worldpay first begun operations under the name ‘Streamline’ in 1989 and was originally owned by NatWest Bank, which was then acquired by RBS in 2002.  The European Commission declared in 2009 that RBS would have to sell Worldpay as a condition of approving state aid to the bank.

The following year, Worldpay was sold to private equity firms Advent International and Bain Capital for £2bn. Most recently in January 2018, US payments processing technology company Vantiv merged with and acquired WorldPay for £9.3bn.

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