International provider of financial services technology and outsourcing services, Fidelity National Information Services Inc., also known as FIS has agreed to buy out Worldpay Inc., an e-commerce and payments company for about $34 billion in cash and stock.
The deal has been finalised at an enterprise valuation to about $43 billion, and FIS with the deal would also see FIS take on WorldPay’s debt in its books. FIS’s current shareholders will own 53 per cent of the combined company, and Worldpay’s investor will hold the remaining 47 per cent. The shareholder of Worldpay is entitled to receive 0.9287 FIS shares plus $11 in cash in exchange to each Worldpay’s share.
Following the acquisition, both companies will have approximately $12.3 billion in pro forma 2018 annual revenue. According to a report by Boston Consultancy Group, the revenue in the payments industry is projected at $2.7 trillion by 2027.
Worldpay will be merged into FIS and will shed its previous identity and will be headquartered in Jacksonville, Florida. The new Board will be made up of 12 members, 7 from the FIS Board of Directors and the remaining five will come from Worldpay. Gary Norcross, Chairman, President and Chief Executive Officer of FIS will continue in his position, whereas, Worldpay Executive Chairman and Chief Executive Officer, Charles Drucker will become Executive Vice Chairman of the Board of Directors.
The combined entity would serve the high growth e-commerce industry, and when the deal is completed, it would become the biggest in the data processing and payments industry. Post the deal announcement, the shares of Worldpay jumped by 10.4 per cent to 8,179 pence in London.
The transaction is subjected to regulatory and shareholder approval and is expected to get completed in the second half of this year.
Gary Norcross commented on the acquisition:
“Scale matters in our rapidly changing industry. 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.”
Charles Drucker of Worldpay also added:
“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 benefitting from new scale and capabilities that will truly differentiate the company globally.”
“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.”