FIS takes a back seat in Worldpay operations
By Isabelle Castro Margaroli
Turning to the “Big Fintech” world today, Fidelity National Information Services (FIS) have announced the sale of a majority stake in Worldpay at a significant loss.?
Worldpay was FIS’s ticket to the payments industry. Acquired in 2019 for $35 billion, it had all the glittering promise of a payments provider poised for expansion. However, market shifts in the wake of the COVID19 pandemic caused its growth to stop significantly short of expectations.?
FIS had a conundrum - its juggling of both businesses was mutually detrimental, and earnings were starting to show it.?
Company announcements in early 2023 were the first we heard of their plans to take a back seat.?Then murmurs were heard ?last week that FIS was in talks with GTCR.
An agreement was reached, and apparently, although 55% of the business is being sold at less than half of the 2019 valuation, Fidelity's board is all in approval.?As a result, the company has said it is likely to deliver results for Q2 2023 that are slightly higher than the midpoint of guidance.
The deal marks Worldpay's return to private equity ownership, and although it?won't close until Q1 2024, already the markets are responding.?WSJ reported ?a rise of 2.5% in premarket trading, but since 9:30 am EDT, FIS has been well into the red.?
FEATURED
Private-equity firm GTCR will hold a 55% stake following the deal that values the payment processor at $18.5 billion.
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