GTCR Buys Majority Stake In Worldpay From FIS For $18.5 Billion

(CTN News) – A majority stake in Fidelity National Information Services’ Worldpay business has been sold to GTCR private equity funds in a deal valued at up to $18.5 billion.

A Florida-based business, FIS, will receive $11.7 billion in cash in exchange for a 45% ownership interest in Worldpay, a non-controlling interest.

According to FIS, the funds will be used in part to pay down debt and provide additional capital to stockholders in the form of dividends.

As a result of the transaction, FIS will be able to partially monetize its Merchant Solutions business at an attractive valuation and provide certainty to all stakeholders, said Stephanie Ferris, president and chief executive officer of FIS.

Consequently, our sales process has been simplified and we are able to focus more on delivering innovative, next-generation financial technology and software solutions to our clients.”

Taking into account GTCR’s $17.5B value of Worldpay upfront, the company’s estimated fiscal 2023 adjusted core earnings are 9.8 times GTCR’s initial $17.5B valuation, according to FIS.

The valuation could be increased by an additional $1 billion based on the returns that GTCR is able to realize.

In an interview with the Chicago-based GTCR, co-chief executive and managing director Collin Roche stated that his group is confident that Worldpay will continue to grow on a sustained, long-term basis.

The board of directors of FIS unanimously approved the deal, which is expected to close in the first quarter of 2024, as expected.

With the sale of Worldpay, FIS will largely unwind the purchase of Worldpay it made in 2019 for a whopping $30 billion, creating a global payments and back-office services behemoth that wanted to cater to the needs of customers who were eager to make purchases online.

A pandemic-driven change in payment trends, however, weighed heavily on Worldpay’s performance during the quarter.

In a press release earlier this year, FIS stated that it was considering splitting off WorldPay into a separate company, arguing that this would enhance the performance of the company and boost its investment credit rating.

On Thursday, the shares of FIS fell in early trade, following a general decline in the stock market. A rise in the share price had been reported by the Financial Times on Monday, following a report that FIS was in talks with GTCR and Advent International about Worldpay.

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