Fidelity National Information Services, Inc. (NYSE: FIS) entered into an agreement on Monday to acquire Worldpay (NYSE: WP) for total enterprise value of USD 43 Billion, including debt, which FIS expects to refinance.
Worldpay shares surged by 13% during Monday’s pre-market hours following the announcement.
The merger between two major payment solution companies expands upon FIS’ capabilities. The acquisition will further FIS’ payment offerings by adding Worldpay’s distribution footprint, allowing FIS to enter into regions. The two companies are expected to offer best-in-class enterprise banking, payments, capital markets, and global eCommerce capabilities to help financial institutions and businesses.
FIS and Worldpay both offer solutions and services for financial institution issuer services, networks, and merchant services. The two also offer loyalty and fraud prevention solutions to benefit consumers and businesses. Clients of the two will benefit from the combined payment channel and multi-currency capabilities, robust risk, fraud solutions, and data analytics.
“Scale matters in our rapidly changing industry,” stated Gary Norcross, Chairman, President and Chief Executive Officer, FIS. “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.”
The acquisition is expected to bolster FIS’ organic revenue. Through 2021, FIS expects organic revenue growth outlook of 6% to 9%, in conjunction with USD 700 Million of total EBITDA synergies over the next three years. The combined company will also have pro forma 2018 annual revenue and adjusted EBITDA of approximately USD 12.3 Billion and USD 4.9 Billion, respectively.
Under the terms of the transaction, Worldpay shareholders will receive 0.93 FIS shares and USD 11 in cash for each share of Worldpay. Upon closing, FIS shareholders will own approximately 53% and Worldpay shareholders will own approximately 47% of the share company.
Upon closing, the combined company will have a Board of Directors, consisting of 12 members, seven of which will be from FIS and the remaining from Worldpay. The Company is expected to be headquartered in Jacksonville, Florida. The transaction is expected to close in the second half of 2019.