Market Overview

Worldpay Sold To Fidelity National In $34B Deal To 'Accelerate The Future Of Finance'

Worldpay Sold To Fidelity National In $34B Deal To 'Accelerate The Future Of Finance'

Fidelity National Information Servcs Inc (NYSE: FIS) reached an agreement to buy Worldpay, Inc. (NYSE: WP), an e-commerce and payments company for around $34 billion.

What Happened

The combination of FIS and Worldpay will create a new entity that will offer a best-in-class enterprise banking, payments, capital markets and global e-commerce capabilities, the companies said in a press release. The companies combined for $12.3 billion in pro forma annual revenue in 2018.

As part of the agreement, Worldpay investors will receive 0.9287 FIS shares and $11 in cash for each share of Worldpay owned. The math behind the deal implies a premium of around 14 percent based on Friday's closing stock prices.

Shares of Worldpay were trading higher by more than 10 percent Monday morning, while FIS was up by nearly 2 percent.

Why It's Important

The companies said the rationale behind the merger is to "accelerate the future of finance and commerce globally." The companies will combine their complementary solutions and services to better offer a superior omni-channel payment and multi-currency capabilities.

"As a combined organization, we will bring the most modern solutions targeted at the highest growth markets," Gary Norcross, chairman, president and CEO of FIS said in the press release.

What's Next

The companies expect the merger to close in the back half of 2019 and FIS shareholders will own 53 percent of the new company. The deal is expected to help FIS grow its organic revenue by 6-9 percent through 2021.

The deal is also expected to generate $500 million in revenue synergies, $400 million of run-rate expense synergies and generate nearly $4.5 billion in free cash flow within three years.

Related Links:

Guggenheim Downgrades Worldpay After Strong Rally

BofA: Merger Synergies A P&L Accelerator For Worldpay

Posted-In: Digital Payments financial services Gary Norcross paymentsFintech M&A News Best of Benzinga


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