The FIS-Worldpay Merger: Creating a Global Powerhouse in the Payments Industry
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Case Code: BSTR603 Case Length: 14 Pages Period: 2017-2020 Pub Date: 2020 Teaching Note: Available |
Price: Rs.400 Organization: Fidelity National Information Services, Inc. Industry: Financial Services Countries: United States Themes: M&A , Competitive Strategy, Industry Analysis, Disruption |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
A Note on FIS
The history of FIS was connected to SystematicsTM which was founded in 1968 and later acquired by ALLTEL Information Services. In 2003, it was taken over by Fidelity National Financial ® (Fidelity). Fidelity later renamed the company FIS. Over a period of time, FIS acquired various companies to grow in terms of size, offering, geography, etc...
A Note on Worldpay
According to the company’s annual report 2018, Worldpay was the largest merchant acquirer in the world in terms of the number of transactions. The company was a leading eCommerce and payment technology company that offered innovative payment methods and technology, integrated payment solutions, omnichannel solutions, enterprise payment solutions, and data security solutions to its clients. Worldpay’s clients included retail giants as well as small businesses. Some of its clients were Tesco, Marks & Spencer, TopShop, Clarks, Monsoon, and Accessorize....
FIS Acquires Worldpay
Analysts believed that the 90% stock and 10% cash merger deal had created a global leader in the finance and payments technology space. The deal helped FIS become the largest processing and payments company in the world, leaving behind Fiserv. The shareholders of Worldpay received 0.9287 shares of FIS and US$11 in cash for each share of Worldpay. As per the conversion ratio, the implied value of Worldpay was US$112.12 per share and the total implied equity value was US$35.5 billion...
Challenges Ahead
The integration of the two companies (FIS and Worldpay) was one of the major challenges in front of the management of the combined entity. Experts opined that FIS’s management would have to grapple with cultural and operational integration issues. The management of the new entity had to be ready to adopt new cultural norms and have a fresh mindset to integrate Worldpay effectively and to realize all anticipated synergies without any integration risk...
Exhibits
Exhibit I: Payments Industry Ecosystem
Exhibit II: Leading Payments Organizations rival Banks in Market Capitalization in September 2017
Exhibit III: Payment and Fintech M&A Activity since January 2018
Exhibit IV: Selected Restated Financial Information of FIS
Exhibit V: Selected Financial Information of Worldpay
Exhibit VI: Detailed Synergy Breakup
Exhibit VII: Expected Financial Numbers of Combined Company
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