Fidelity National Information Services, the US financial technology group, has reached an agreement to sell a majority stake (55%) in its Worldpay merchant payments division to private equity firm GTCR, in a deal valued at a remarkable US$18.5 billion, making it one of the largest carve-outs in history. As part of the transaction, Worldpay's new majority owners will invest an additional US$1.25 billion to accelerate the company's expansion and progress.
According to a statement, Fidelity National Information Services (FIS) will receive an initial proceeds of $11.7 billion under the deal and will retain a 45% stake in the newly formed entity. The deal effectively reverses FIS's previous acquisition of Worldpay for $43 billion in 2019. Worldpay faced challenges with traditional competitors and emerging fintech startups, which led to a loss of market share. In December, FIS, led by CEO Stephanie Ferris, launched a strategic review, after which it announced in February that it would consider spinning off its business services unit, which is responsible for processing transactions for businesses. Since completing its acquisition of Worldpay in 2019, FIS shares have plunged more than 50%, causing its market capitalization to fall to about $35 billion.
FIS is a renowned provider of data and technology solutions for banks and various financial institutions. Its comprehensive software and services play a key role in everyday financial operations, including activities such as checking consumer bank account balances. Worldpay is one of the leading payment processors that specializes in helping merchants accept card payments. With a staggering $2 trillion in payment volume last year, Worldpay holds a significant position as one of the largest merchant payment processors in the world.
GTCR will finance the purchase with more than US$8 billion in bank debt financing. In the current environment of expensive and limited debt financing and economic uncertainty, this carve-out represents the most significant leveraged buyout in 2023.