FIS Makes It Official: It’s Selling a 55% Worldpay Stake to GTCR at an $18.5 Billion Valuation

In a fleeting 10-minute conference call, FIS Inc. announced early Thursday a move to sell a 55% interest in its merchant-processing business, which principally consists of the Worldpay unit it acquired four years ago, to the private-equity firm GTCR. The deal is expected to close by the end of the first quarter of 2024, FIS chief executive Stephanie Ferris told equity analysts during the call. Questions were not taken.

The announcement, which had been widely expected, values the acquiring business at $18.5 billion, with FIS receiving $11.7 billion upfront. The valuation is “in line with scale payments players,” FIS chief executive Stephanie Ferris said on the call.

The proceeds from the deal will enable FIS to pay down debt, Ferris said, and will position the company to “participate on the returns on Worldpay.” She touted the Worldpay operation as the world’s largest global acquirer by volume, with $2 trillion in payments volume last year.

As was widely expected, Chicago-based GTCR and FIS appointed payments veteran Charles Drucker to run the Worldpay operation as chief executive. Drucker had been CEO of Worldpay when FIS acquired it in 2019 for $43 billion.

Jacksonville, Fla.-based FIS announced in February it planned to spin off Worldpay as an independent company with Drucker in charge. On the early Thursday call, Ferris said the company received “multiple expressions of interest” after the February announcement, but “changed course so FIS could “participate in the returns on Worldpay.” By retaining a substantial interest in Worldpay, she added, FIS can “capitalize on trends in large and growing [payments] markets.”

After paying down debt, FIS will have approximately $2.5 billion it can use for share repurchases, Erik Hoag, FIS’s chief financial officer, said during the Thursday morning call. Wall Street’s early reaction to the announcement was muted. Shortly after the opening of markets, FIS was trading down 2% at $58.50 per share.

Some observers are reacting cautiously to FIS’s plan for Worldpay. The deal with GTCR “would imply to me they recognize there’s a need for additional capital to pursue growth for Worldpay and they weren’t willing to put that in themselves,” says Thad Peterson, strategic advisor at the consulting firm Datos Insights, formerly Aite-Novarica. “They don’t have the appetite to provide that.”