A Worldpay booth during the Money 20/20 conference in Las Vegas, US. Reuters
NEW YORK: US Fintech group Fidelity National Information Services (FIS) has agreed to buy payment processor Worldpay for about $35 billion, in the biggest deal to date in the booming payments industry.
The deal is the latest in a wave of consolidation in the financial software and payments technology sectors as firms bulk up to compete with newcomers seeking to disrupt the way merchants are paid.
US-based Fiserv Inc bought payment processor First Data Corp in January for $22 billion. In Europe, startups such as Italy’s Nexi plan to list, capitalising on booming interest in the industry fuelled by surging online sales.
The FIS offer for Worldpay, which was bought by US credit card processing company Vantiv in 2017 for $10.63 billion, values Worldpay at about $43 billion, when debt is included, the companies said on Monday.
Worldpay’s London listed shares were up 9.4 per cent at 8,104 pence in early trading on Monday.
“Scale matters in our rapidly changing industry,” FIS Chief Executive Officer Gary Norcross said in a statement. Worldpay shareholders will receive 0.9287 FIS shares and $11 in cash for each share held, valuing the company at $112.12 per share — a premium of about 14 per cent based on the stocks’ Friday closing, according to Reuters calculations.
The combined entity will have revenue of about $12 billion, the companies said.
Upon closing, FIS shareholders will own about 53 per cent and Worldpay shareholders about 47 per cent of the combined company.
Worldpay, which has provided payment processing services for more than 40 years, operated as a business unit of Fifth Third Bancorp until June 2009 when it separated as a stand-alone company. It was spun out of RBS to private equity firms Bain Capital and Advent International in 2010.