$35 Billion Takeover of Worldpay Boosts Value of Euro Payments Tech Companies
The recent £35 billion takeover of Worldpay by US company FIS has boosted the share value of other European payments technology companies including Worldline, Ingenico and Wirecard.
Worldpay, formerly known as Streamline, was set up as a subsidiary of NatWest bank back in 1989. It was then bought by RBS in 2002 and re-christened ‘RBS Worldpay’. Unfortunately for RBS, EU state aid rules meant that Worldpay had to be sold for £2 billion back in 2010 to Advent International and Bain Capital, although RBS Group still retained a 20% stake in the newly independent business.
Worldpay was able to become a big player in payment processing after several moves including buying UK credit and debit processing company Cardsave, launching a mobile card processing terminal which connects to smartphones (Worldpay Zinc), and acquiring SecureNet Payment Systems from Sterling Partners.
Worldpay was listed on the London Stock Exchange until 16 January 2018 after which it was acquired by Vantiv to form Worldpay, Inc.
Worldpay processes 40+ billion payments per year across 146 countries, in 126 currencies.
Largest Ever Deal
The £35 billion takeover of Worldpay by US-based FIS is the largest ever deal in the electronic payments industry and has created a consolidated company with combined revenues of over $12 billion.
Following the announcement of the takeover, not only were shares in Worldpay up by 13% at one point, but the deal prompted a boost in the value of other payment technology companies. For example, Worldline share value was up 3.1%, and software company Atos, which owns half of Worldline was up 1.2%. The share values of Ingenico (based in France) and Wirecard (based in Germany) also received boosts with the takeover news.
FIS chairman and chief executive Gary Norcross said that the two companies would “combine forces to offer a customer-driven combination of scale, global presence and the industry's broadest range of global financial solutions”.
What Does This Mean For Your Business?
Market analysts have noted that this acquisition is the latest move in consolidation in the financial software and payments technology sectors where key existing companies are trying to increase their scale in order to compete with new entrants to a market where scale appears to be a necessary requirement to win at payments processing. The deal should also provide new business opportunities for both FIS and Worldpay.
Some commentators have noted the obvious compatibility of the two companies, and the hope is that deal may mean that businesses will have access to a wider portfolio of services that Worldpay can now provide.