Following the completion of the transaction, FIS will maintain 45% ownership in the payment technology company and receive upfront, net proceeds of around $11.7bn from the sale, while Worldpay will get an additional equity investment from GTCR to drive inorganic growth
Following the completion of the transaction, FIS will maintain 45% ownership in the payment technology company and it will also maintain access to Worldpay’s marquee portfolio of commercial clients to resell its embedded finance offerings
US-based financial services technology provider FIS has agreed to divest a majority stake in its Worldpay Merchant Solutions business to private equity funds managed by GTCR at a valuation of $18.5bn.
Worldpay’s valuation from the deal is inclusive of $1bn in additional consideration, which will be contingent on the returns realised by GTCR surpassing certain thresholds.
Following the completion of the transaction, FIS will maintain 45% ownership in the payment technology company. The company will receive upfront, net proceeds of around $11.7bn from the sale.
In line with the transaction, FIS and Worldpay will sign commercial agreements, allowing the latter to access the former’s products to resell to its customers.
Besides, Worldpay will retain access to FIS’ financial institution clients.
FIS will also maintain access to Worldpay’s marquee portfolio of commercial customers for reselling its embedded finance offerings.
Under the agreement, GTCR will make an additional equity capital investment of up to $1.25bn in Worldpay to pursue opportunities for inorganic growth.
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.”
The agreement has come after FIS’ announcement made in February 2023 of its plans to spin off Worldpay into a separate publicly traded business.
Worldpay was acquired by FIS in July 2019 in a cash and stock deal valuing the former at around $43bn, including its debt.
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.”
Upon the closing of the deal, FIS’ ownership interest in Worldpay will be reported as income from the minority stake.
Subject to regulatory approvals and other customary conditions, the deal is anticipated to be completed by Q1 2024.