FIS to acquire payments firm Worldpay for $34bn

Combined firm will serve the “high-growth e-commerce industry” and have combined revenue of about $12bn, the US companies said

A Worldpay booth at the Money 20/20 show in Las Vegas. Contactless shopping payment industry is booming. Reuters

Fidelity National Information Services agreed to acquire Worldpay for about $34 billion in cash and stock, the biggest deal ever in the booming international payments sector.

FIS, based in Jacksonville, Florida, will also assume Worldpay’s debt, bringing the enterprise value of the deal to about $43 billion, the companies said Monday. FIS’ current shareholders will own about 53 per cent of the combined company, while Ohio-based Worldpay’s investors will hold 47 per cent.

Revenue in the payments industry is projected to surge to $2.4 trillion by 2027, according to a report from Boston Consulting Group and Swift, as consumers change how they pay for goods. The rise of contactless payments and the need to change back-end infrastructure has led companies to look for a one-stop shop payments provider.

“Organisations of all types and sizes are looking for new ways to create more meaningful and frictionless experiences and grow their share of wallet through digital channels,” the companies said. “FIS and Worldpay have complementary solutions and services” for banks as well as retailers, and also offer loyalty programs and anti-fraud products, the companies said.

Worldpay shareholders will receive $11 a share in cash and 0.9287 of a FIS share, which is worth a combined $112.12 as of last week’s close. Worldpay’s US-traded shares closed Friday at $98.68.

Worldpay shares jumped 10.4 per cent to 8,179 pence - worth $108.46 - in London at 8:18am, bringing their gains this year to 34 per cent.

The combined firm will serve the “high-growth e-commerce industry” and have combined revenue of about $12bn, the companies said. Gary Norcross, FIS’ chief executive, will be chairman and CEO of the combined company.

The deal - when completed - would make it the biggest in the data processing and payments industry, according to data compiled by Bloomberg News. In January Fiserv agreed to pay $22bn to buy First Data Corp to form the world’s largest payments processor.

Initial public offerings in the sector have been hot, too. Italy’s Nexi said Monday that it plans an IPO in Milan by the end of April, and it aims to raise as much as €2.7bn (Dh11.25bn), according to people familiar with the plan. Adyen, based in the Netherlands, was one of the best-performing IPOs globally in 2018.

Worldpay’s CEO, Charles Drucker, will become the combined firm’s executive vice-chairman. His company was itself created by a merger: Vantiv bought the former Worldpay Group for more than $10bn in 2017, with the combined company taking the British firm’s name. That Worldpay was once part of Royal Bank of Scotland Group; Vantiv’s roots are in Fifth Third Bancorp.

Centerview Partners and Goldman Sachs were financial advisers to FIS, the companies said, adding that Willkie Farr & Gallagher served as FIS' legal adviser in the transaction.