US fintech titan FIS buys payments firm Worldpay for US$35 bln

March 19, 2019 09:04
The Worldpay-FIS deal will create a powerhouse in banking and payments infrastructure industry. Photo: Reuters

US-based Fidelity National Information Services (FIS) has agreed to buy Worldpay for about US$35 billion, in the biggest deal to date in the fast-growing electronic payments industry, Reuters reports.

“Scale matters in our rapidly changing industry,” said FIS Chief Executive Gary Norcross, who will lead the combined powerhouse in banking and payments infrastructure.

The FIS deal, valuing Worldpay at about US$43 billion including debt, comes a little more than a year after US firm Vantiv paid US$10.63 billion for the payments firm, which was set up in Britain and spun off from Royal Bank of Scotland in 2010.

FIS and Worldpay combined will have annual revenue of about US$12 billion and adjusted core earnings of about US$5 billion.

“Vantiv had yet to realize all the synergies from the Worldpay merger but FIS’s offer was too good to be refused,” a source close to the deal told Reuters.

Worldpay is a major player in card payments, particularly in Britain, while FIS, produces software for banks and asset managers as well as its financial services outsourcing business.

Worldpay shareholders will receive 0.9287 FIS shares and US$11 in cash for each share held, valuing the company at US$112.12 per share, a premium of about 14 percent on its Friday close.

FIS shareholders will own about 53 percent in the combined firm and Worldpay’s about 47 percent, with Worldpay Chief Executive Charles Drucker becoming executive vice-chairman.

The companies said the deal would result in an organic revenue growth outlook of 6 to 9 percent through 2021, and US$700 million of total core earnings savings over three years.

FIS, which has grown through acquisitions in the past 15 years, offers software and outsourcing services to banks, asset managers and insurers. In 2015, the company completed the acquisition of financial software company SunGard for US$9.1 billion.

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