WorldPay in £32bn merger with US payments processor FIS

WorldPay: Sold by RBS for £2bn in 2010; scooped up by Fidelity National Information Services nine years later

WorldPay, the payments processor founded by NatWest, has been sold to US payments firm Fidelity National Information Services for £32 billion. The acquisition comes just over 18 months after it was acquired by Vantiv, another US payments firm, for $10.4 billion. Vantiv changed its name to WorldPay Inc following that acquisition.

The payments industry is currently undergoing a global shake-up, partly wrought by globalisation and the removal of trade barriers, but also the coming of technologies such as Apple Pay and Android Pay. Boston Consulting claims that the industry will be worth $2.4 trillion annually by 2027.

According to Bloomberg, companies such as WorldPay, Chase Paymentech and First Data each handle around $1 trillion in payments every year.

The FIS-WorldPay merger reflects an increasing level of consolidation in the global payments market, with economies of scale required for banks and companies to compete as margins are squeezed.

FIS and Worldpay look like a good fit and the two companies have fairly complementary offerings

Shareholders of Jacksonville, Florida-based Fidelity National Information Services will take a 53 per cent stake in the combined entity, while WorldPay's investors will hold 47 per cent, and also receive $11 per share in cash.

"FIS and Worldpay look like a good fit and the two companies have fairly complementary offerings. FIS is no stranger to largescale M&A," noted TechMarketView analyst Jon Davies.

He continued: "The $43bn deal is the latest sign of the accelerating pace of change in the global payments space and comes during an active period for M&A in the sector."

In 2016, before its acquisition by Vantiv, WorldPay boasted annual revenues of £4.5 billion and a net income of £131.5 million.

WorldPay became part of the Royal Bank of Scotland Group when it acquired NatWest in 2002, but was forced to sell it off by European Union regulators under the terms of its 2009 bail-out.

In August 2010, it was acquired by private equity firms Advent International and Bain Capital, each owning 40 per cent each, with RBS retaining a 20 per cent stake, which was sold in 2013.

Prior to its acquisition by Vantiv, WorldPay itself had played its fair share of consolidation in the global payments market, acquiring Cardsave, Envoy Services, Century Payments and SecureNet Payment Systems.