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The massive transaction processor Worldpay is coming to Global Payments Inc., and Global’s top management couldn’t be happier about it as analysts continue to study the $22.7 billion transaction announced last month. “We are so incredibly excited about the Worldpay acquisition,” said Global’s chief executive, Cameron Bready, in an early-morning call Tuesday with equity analysts. “Worldpay couldn’t be a better complement to our merchant business.”
The seller, FIS Inc., professes to be equally happy about the multi-dimensional deal, which also involves FIS’s agreement to pay $13.5 billion to acquire Global’s issuing business, formerly known as TSYS. The sale of its 45% Worldpay stake, combined with its agreement to buy TSYS, focuses FIS on card issuing rather than acquiring, said FIS chief executive Stephanie Ferris in an earnings call also held Tuesday morning. “It will strengthen our proposition to clients,” she noted.
In the deal, Worldpay’s majority owner, the private-equity firm GTCR, will receive cash and a 15% interest in Global Payments. Both Worldpay and Global held conference calls Tuesday to discuss their first-quarter financial performance, though to no one’s surprise the Worldpay-TSYS deal dominated the discussion.
For Global, the deal refocuses the company on merchant acquiring, a business in which it is already a major player and in which it clearly sees greater potential than in issuing. “This transaction cements our growth profile and enhances or portfolio,” noted Bready. “We have line of sight to revenue enhancement and cost synergies form the acquisition.” Longer term, he said, the deal will bring technology that will support future expansion in market share, he said.
With Worldpay under FIS, he added, “we’re seeing very good growth trends. Worldpay continues to invest” in its business. Also, he said, “the new sales we see [at Worldpay] are very encouraging. They’re solidly a mid-single-digit grower.”
The integration of Worldpay will come as Global prepares to introduce its Genius platform, an offering of new point-of-sale products for merchants and restaurants. “We’re building a lot of excitement about that rollout,” Bready said, an event he said should occur “in a couple of weeks.”
Ferris for her part congratulated Global on the deal for Worldpay. “It’ll be a great asset for Global Payments,” she told equity analysts on the morning call. The unit’s management, she said, “feels really good about where they’re taking it. They’re highly focused on execution.”
At the same time, Ferris made it plain FIS has high expectations for the issuing business it’s getting from Global. “We know them, they have a great brand,” she said during the earnings call. “We’re hearing very strong commitments [from clients] to them. It’s very positive all around.”
For the quarter, FIS reported $2.5 billion in total revenue, up 4% year-over-year. For Global Payments, revenue grew 1% to $2.2 billion.
