The Potential Acquisition of Worldpay Inc by Private Equity Groups
Introduction
Private equity groups are currently evaluating the possibility of purchasing a majority stake in Worldpay Inc, a prominent payments provider. This potential acquisition is being valued at over $15 billion, which would make it one of the largest corporate transactions in recent years. The consideration of this deal by various private equity firms, including Advent and GTCR, highlights the growing interest in the payments industry and the potential for significant returns on investment. While no agreement has been reached yet, the discussions surrounding this potential acquisition have generated significant market speculation and interest.
The Involvement of Advent and GTCR
Advent, a US acquisitions firm, has emerged as one of the interested parties considering a bid for Worldpay Inc. Advent was previously involved in a consortium that owned a stake in Worldpay and has a deep understanding of the company’s operations. Additionally, GTCR, a Chicago-based private equity group that sold a business to Worldpay in 2010, has also been studying the possibility of making an offer. The involvement of these reputable firms further validates the attractiveness of Worldpay Inc as an investment opportunity.
A Potential Departure from Fidelity National Information Services’ (FIS) Strategy
If FIS decides to accept an offer for Worldpay Inc, it would mark a departure from its previously announced spin-off strategy. FIS initially planned to separate Worldpay into a separate publicly traded company, aiming to unlock its value and provide investors with focused exposure to the payments industry. However, the potential sale of Worldpay to private equity groups would present a different path forward for FIS, potentially enabling them to leverage the substantial valuation that the company has garnered in recent years.
Potential Financing from Wall Street Lenders
Reports suggest that big Wall Street lenders are currently in discussions to provide financing for the potential acquisition of Worldpay Inc. This is notable as many banks have been hesitant to finance large acquisitions following past difficulties in offloading debt to third-party investors. The fact that banks are considering providing financing for this deal signals their confidence in the potential success of Worldpay Inc and the credibility of the private equity groups involved. It also demonstrates a renewed willingness to support mergers and acquisitions in the payments industry.
FIS’ Previous Acquisition of Worldpay
It is important to note that FIS acquired Worldpay in a landmark deal over four years ago. The acquisition, worth over $30 billion, aimed to create a diversified financial technology company offering payment processing services to major banks and retailers. This acquisition positioned FIS as a leader in the payments industry and has significantly contributed to the company’s growth and success in recent years.
Activist Involvement in FIS
Last year, activist hedge fund DE Shaw called for an overhaul of FIS’ business structure. As a result, DE Shaw was granted a seat on FIS’ board in December. Another activist investor, Jana Partners, also joined the group. The involvement of activist investors highlights the potential for further changes and strategic decisions within FIS and its subsidiaries, including Worldpay Inc.
Conclusion
The potential acquisition of Worldpay Inc by private equity groups represents a significant development in the payments industry. The evaluation of Worldpay’s value at over $15 billion underscores the immense growth potential and attractiveness of the company. The involvement of reputable private equity firms like Advent and GTCR further validates Worldpay Inc as an attractive investment opportunity. The potential financing from Wall Street lenders indicates renewed confidence in supporting mergers and acquisitions in the payments industry. Overall, the potential acquisition of Worldpay Inc presents an exciting opportunity for investors and stakeholders in the payments sector.
Summary:
Private equity groups are considering acquiring a majority stake in payments provider Worldpay Inc for a valuation exceeding $15 billion. Advent and GTCR are among the interested parties. If Fidelity National Information Services (FIS) accepts an offer, it would deviate from their initial spin-off strategy. Wall Street lenders are discussing financing the deal, indicating a renewed willingness to support mergers and acquisitions. FIS previously acquired Worldpay for over $30 billion, propelling its growth in the payments industry. Activist investors have also played a role in shaping FIS’ strategy. The potential acquisition signifies opportunities in the payments industry and presents an exciting prospect for stakeholders.
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Private equity groups are considering buying a majority stake in payments provider Worldpay from Fidelity National Information Services for a valuation of more than $15 billion in what would be one of the largest corporate cuts ever, according to five people who are familiar with the matter.
US acquisitions firm Advent, which was previously part of a consortium that owned Worldpay, is among the parties considering a bid, according to two of the people. One of those people said Chicago-based GTCR private equity group that sold a business to Worldpay in 2010, has also been studying an offer.
Were FIS to accept an offer, it would mark a change from its spin-off strategy announced in February World Pay in a separate publicly traded company.
An FIS spokesman declined to comment on what they described as market speculation. Advent and GTCR did not immediately respond to requests for comment.
Big Wall Street lenders have been discussing providing financing for the deal, two of the people added. This would signal confidence from banks which have mostly refused to finance large acquisitions after several “stuck deals” in which they have struggled to offload debt to third party investors.
The talks come four years after FIS acquired Worldpay for more than $30 billion in a deal that aimed to create a diversified financial technology company that would offer payment processing services to big banks and merchants such as retailers.
Activist hedge fund DE Shaw last year urged the FIS to overhaul the structure of its business and was given a seat on the firm’s board in December. Jana Partners, another activist, also joined the group.
No deal has been agreed, but if a transaction is completed it would demonstrate how cash-heavy acquiring companies are pursuing large asset cuts.
Advent, which manages $92 billion in assets, bought a majority stake in the business along with Bain Capital from the Royal Bank of Scotland in 2010 amid the financial crisis. He took full control in 2013.
Worldpay was later sold to Vantiv in 2017 before FIS acquired the combined company two years later.
Charles Drucker, who led Worldpay under ownership of Bain and Advent, was hired by FIS as a strategic consultant this February to help with the separation and was named chief executive officer of the merchant payments business it is intending to spin off.
Chicago-based GTCR manages more than $35 billion in assets and closed last month with an $11.5 billion acquisition fund that surpassed its $9.25 billion goal. It specializes in financial services and technology investments and companies operating in the healthcare and business services sector.
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