FIS to buy Worldpay for $35 billion

FIS to buy Worldpay for $35 billion

FIS is to buy Worldpay for $35 billion, in a blockbuster deal which exemplifies the trend towards large scale consolidation in the payments processing space.

As part of the deal, FIS will also assume Worldpay's debt obligations, bringing the total value of the agreement to $43 billion.

Upon closing, FIS shareholders will own approximately 53% and Worldpay shareholders 47% of the combined company.

Worldpay, which was formed in January last year through a takeover by Vantiv, processes over 40 billion transactions annually, supporting more than 300 payment types across more than 120 currencies.

The combined firm will serve the “high-growth e-commerce industry” and have combined revenue of about $12 billion.

“Scale matters in our rapidly changing industry,” states Gary Norcross, chairman, president and chief executive officer, FIS. “Upon closing later this year, our two powerhouse organisations will combine forces to offer a customer-driven combination of scale, global presence and the industry’s broadest range of global financial solutions."

The company is forecasting organic revenue growth outlook of between six and nine percent through 2021, in conjunction with $700 million of total Ebitda synergies over the next three years.

It marks the biggest deal by far in the fast consolidating payments industry, elcipsing Fiserv's $22 billion takeover of First Data in January.

Comments: (2)

Gerard Hergenroeder
Gerard Hergenroeder - Payments Shark - Millersvile 18 March, 2019, 15:24Be the first to give this comment the thumbs up 0 likes

This is great news. The challenge now is marketing and operations execution to realize revenue growth and cost savings. Full integration of people, processes and especially technology could take 5 to 7 years.

A Finextra member
A Finextra member 19 March, 2019, 11:53Be the first to give this comment the thumbs up 0 likes

The opportunity here is not just consolidation it is the convergence of payments types (schemes/rails). Put simply, from the top-end cards predominate on the acquiring side (POS) but all over the world Nations are implementing Real Time Payments (RTP) schemes/rails that are low cost, data rich, secure, irrevocable and inclusive. RTP is coming up from the bottom as alternative to the card networks. It will not look very different to users except they will eventuality find they could do more for less [cost].

The convergence of international standards will lead to global interoperability amongst national schemes to the point where frictionless international account to account payments will be commonplace, cheap and safe within the financial system. Think $600B of workers remittances sent by 3.5% of the world’s population at great expense through some insecure unregulated providers. 

Not only is the technology for the schemes different so are the economics (what makes them viable today). FIS needs to spread its net wide to capture as much as it can now and manage this convergence of payments, with their customersto the Target Operating Model as payments go from regionalised, proprietary and complex to standard, simple global and less expensive.