FIS Buys Worldpay In $35B Cash, Stock Deal

Fidelity Information Services (FIS), a global financial services technology company, announced Monday (March 18) it is merging with Worldpay, the global eCommerce and payments company, in a roughly $35 billion dollar deal.

In a press release, FIS said the deal expands its capabilities by enhancing its acquiring and payment offerings. For Worldpay, it expands its distribution footprint and accelerates its entrance into new regions. Once the deal is closed, the combined company will offer enterprise banking, payments, capital markets and global eCommerce services to financial institutions and businesses around the world.

Scale matters in our rapidly changing industry,” stated Gary Norcross, chairman, president and chief executive officer of FIS, in the press release. “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. I have never been more excited about the future of FIS.

Under the terms of the deal, Worldpay shareholders will get 0.9287 FIS shares and $11.00 in cash for each share of Worldpay. FIS shareholders will own around 53 percent of the company while Worldpay shareholders will own about 47 percent. FIS is paying with a combination of stock and cash that values Worldpay about $43 billion, including the assumption of Worldpay, debt which FIS said it plans to refinance.  Worldpay processes more than 40 billion transactions each year and supports more than 300 payment types in more than 120 currencies.

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 of Worldpay, in the same press release. “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.

The companies said the deal will immediately accelerate revue growth for FIS and create opportunities to grow revenue across the merchant and banking industries. FIS said it expects organic revenue growth of 6 percent to 9 percent through 2021, $700 million of total EBITDA synergies and pro forma 2018 revenue and adjusted EBITDA of about $12.3 billion and $4.9 billion, respectively.  Once the deal is closed, the board will be made up of twelve, with seven coming from FIS and five from Worldpay.  Gary Norcross will remain as FIS chairman of the board, president and chief executive officer. Charles Drucker, Worldpay’s current executive chairman and CEO, will serve as the executive vice chairman of the board. The combined company will retain the FIS name and be headquartered in Jacksonville, Florida.

The deal between FIS and Worldplay comes at a time when the payments industry is facing consolidation as the firms try to find ways to curb expenses, grow their user bases and launch new products.  For FIS it marks the company’s largest acquisition ever. In 2015 it paid $5.1 billion for Sungard.