Private equity firm GTCR has agreed to acquire a majority stake in Worldpay Merchant Solutions business from Fidelity National Information Services (FIS).
Under the terms of the agreement, GTCR will acquire 55% of Worldpay, and FIS will retain the remaining 45%, in a transaction that values the merchant business at $18.5bn.
FIS will receive around $11.7bn in upfront payment, along with $1bn of additional consideration, contingent on the returns realised by GTCR beyond certain thresholds.
In addition, GTCR is expected to make an additional up to $1.25bn equity capital investment in Worldpay, to pursue inorganic growth opportunities.
FIS intends to use the proceeds from the transaction to repay its corporate debt, return additional capital to shareholders, and spend for general purposes.
The transaction will advance its previously announced separation plan to create two highly focused global companies, said the US-based financial services technology company.
FIS CEO and president Stephanie Ferris said: “This transaction allows FIS to partially monetise our Merchant Solutions business at an attractive valuation and provides certainty for all stakeholders.
“It also allows us to simplify and drive greater focus on delivering innovative, next-generation financial technology and software solutions.
“At the same time, Worldpay will become a privately held company and benefit from the resources and expertise of GTCR, which has committed additional capital to allow Worldpay to pursue inorganic growth in the rapidly evolving payments space.”
As part of the transaction, Worldpay former executive chairman and chief executive officer Charles Drucker will be appointed as CEO of the standalone Worldpay business.
Worldpay incoming CEO Charles Drucker said: “This new separation path positions Worldpay for immediate success, combining the benefits of a well-established global brand and group of talented payments professionals with the energy of an independent startup, all backed by a world-class private equity firm.”
The transaction is expected to be completed by the first quarter of 2024, subject to receipt of regulatory approvals, contractual consents, and other customary closing conditions.
Upon closing, Worldpay and FIS will sign agreements to work collaboratively on a commercial basis, to better serve individual customers and deliver solutions.
The agreements would allow Worldpay to continue accessing FIS products, along with its financial institution clients, while FIS will retain access to Worldpay’s marquee portfolio.
Worldpay is a global provider of payments technology and solutions that enable merchants to accept and process in-store, online and mobile electronic payments.
With more than $2 trillion of transaction volume per annum, it serves more than one million merchant locations, across retail, technology, media, travel, gaming and financial services industries.
GTCR co-CEO and managing director Collin Roche said: “We are thrilled to be working with Charles and the Worldpay leadership team to build on the company’s culture of innovation, invest in new capabilities and advance its leadership position across channels and geographies.
“As a firm, we have a long history of investing in the payments sector, and that experience provides us with tremendous confidence in the opportunity for sustained, long-term growth at Worldpay.”
