Fidelity snaps up Worldpay to create payments giant

19 March 2019

US financial services corporation Fidelity National Information Services (FIS) has struck a $35bn (£26.4bn/€30.8bn) deal to acquire Worldpay, one of the iGaming industry’s most prominent payment providers.

The takeover has been agreed 14 months after Worldpay was bought by rival Vantiv for $10.63bn in a deal that saw the combined business, which has since operated under the Worldpay name, offer services in 146 countries and 126 currencies. Worldpay’s clients include online gambling companies, state lotteries and land-based casinos.

The merger values Worldpay at about $43bn, including debt, which FIS said that it expects to refinance.

The transaction is subject to regulatory and shareholder approvals and is expected to close in the second half of this year. FIS shareholders will have 53% of the combined business’ shareholding, versus Worldpay shareholders with 47%.

“Scale matters in our rapidly changing industry,” said Gary Norcross, who will remain chairman, president and chief executive of FIS following the takeover, with Worldpay’s executive chairman and chief executive, Charles Drucker, serving as the new board’s executive vice-chairman.

“Upon closing later this year, our two powerhouse organisations will combine forces to offer a customer-driven combination of scale, global presence and the industry’s broadest range of global financial solutions," Norcross (pictured) added. "As a combined organisation, we will bring the most modern solutions targeted at the highest growth markets.”

Worldpay was established in Britain more than 40 years ago and was spun off for just £2bn from the Royal Bank of Scotland in 2010 as a condition under European Union regulations following the bank’s state financial bailout in the wake of the global financial crisis.

FIS and Worldpay will have combined annual turnover of about $12bn and adjusted core earnings of about $5bn, with organic revenue growth of 6-9% and $700m of savings anticipated over three years.

Russ Mould, investment director at AJ Bell, told the Reuters news agency that the merger will give the combined business “a very strong position by which to play the structural growth in digital payments”.

The takeover has been announced at a time of increasing consolidation in the global payments sector. Italy-based Nexi plans to float in the coming months in what could be one of Europe’s biggest initial public offerings this year, while US-based Fiserv acquired payment processor First Data for $22bn in January.

In November, Worldpay announced a strategic partnership with Paysafe Group with the aim of capitalising on the growth of the iGaming market in the US.