Private equity firm GTCR LLC agreed to buy a majority stake in Worldpay, the merchant-acquiring business of Fidelity National Information Services Inc., in a deal valuing the target at $18.5 billion.
FIS will receive upfront, net proceeds of about $11.7 billion and retain a non-controlling 45% ownership interest in the new standalone joint venture, according to a statement Thursday. The valuation includes $1 billion contingent on returns realized by GTCR.
The deal is a part of a turnaround plan crafted by Stephanie Ferris, FIS's newly installed chief executive officer. Ferris has argued that the merchant business — which FIS bought just four years ago — has lost market share to traditional rivals and upstarts alike because it's been tethered to FIS and largely unable to do additional mergers and acquisitions that would give it better scale. FIS booked a $17.6 billion
"This transaction allows FIS to partially monetize our merchant-solutions business at an attractive valuation, and provides certainty for all stakeholders," Ferris said in the statement.
The cash proceeds will create capital-allocation flexibility, and FIS said it will use the funds to pay down debt and return additional capital to shareholders, as well as for general corporate purposes. FIS, which lost 12% this year through Wednesday, gained 2% in early New York trading.
Merchant acquirers such as Worldpay sign up businesses to handle their electronic payments. Worldpay's volume last year was $2 trillion.
Founded in 1980, Chicago-based GTCR manages more than $35 billion in equity capital and focuses on sectors including financial services and technology. The private equity firm in May
