The American FinTech Fidelity National Information Services enters into a definitive merger agreement with the payments giant WorldPay: a $35 Bn acquisition in stock and cash values (€30.85 Bn).
Goal: Build a new payment industry leader.
FIS shareholders will own 53% and WorldPay shareholders will own 47% of the combined company. The transaction is expected to close in H2 2019.
The combined company will have approximately $12.3 Bn pro forma 2018 annual revenue and adjusted EBITDA of approximately $12.3 Bn.
They envision an organic revenue growth ranging from 6 to 9% through 2021
They anticipate nearly $4.5 Bn in free cash flow in three years
They expect $500 M in revenue synergies, and $400 M of run-rate expense synergies
A promising sector. Industry giants are securing their positions and have been announcing more external acquisitions. A way for them to scale up significantly. For FIS, this operation is a means to aim for diversification and enter the fast-growing payment sector.
Consistent evolution. According to a survey by McKinsey, the e-payment market should be worth $3,000 Bn by 2023. Fewer people choose to rely on cash as more favour digital solutions when making purchases. This trend accounts for the persisting focus on consolidating this industry.
Post-acquisition. One of the main challenges for these groups would be to build a joint corporate culture and define their strategy on a market which experiences high competitive pressure.
Less than 2 years ago, WorldPay bought out Vantiv, which was also rebranded. FIS, too carried out several acquisition processes, the largest of which remains their buyout of SunGard for $9 Bn.