Fidelity National Information Services on Monday agreed to buy Worldpay for $35 billion in cash and stock, as a wave of consolidation continued in the payment processing industry. Advancing the way the world pays, banks and invests™
The company was making Both companies were facing fierce competition from disruptive upstarts releasing innovative solutions at a rapid pace.
That being said, it might be wise to hold off on investing in the new entity until investors see positive results.Stock Advisor launched in February of 2002. You can contact FIS' Board of Directors to provide comments, to report concerns, or to ask a question, at the following address.You may submit your concern anonymously or confidentially by postal mail. We're here to help.©2020 FIS. The combination of stock and cash values the merger at about $33.5 billion, but when the assumption of Worldpay's debt is included, the deal's FIS primarily serves financial institutions by providing them with transaction processing, digital channel solutions, fraud prevention tools, and card issuing services. For Worldpay shareholders, the result of the announcement is a little less clear. See you at the top!
Returns as of 09/02/2020. Image source: Fidelity National Information Services, Inc.Most noteworthy, perhaps, is that the agreement comes on the heels of a The fact that two such similar deals were made so close to one another raises an important question on the motives behind the latest merger. He is most familiar with the fintech and payments industry and devotes much of his writing to covering these two sectors. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Worldpay makes the majority of its revenue by offering payment processing solutions to merchants. Overnight, the company went from reporting decreasing revenue in its most recent quarter to projecting high single-digit growth over the next three years. You've got disruptors coming in. X Image source: Getty Images.In the conference call immediately following the announcement of the deal, transcribed by Fidelity National CFO James Woodall stated it expects to realize $500 million in revenue synergies, stating:We have clear line of sight on global expansion of payment solutions in high growth markets such as India and Brazil, where we have existing presence at scale, enhancing fraud solutions and increasing authorization rates for our customers, driving significant increase in dollar volumes processed, cross-selling of payment processing, enabling faster payment initiatives and alternative payment types and expanding into B2B commercial payments in capturing the high demand for data analytics and insights.Of cost synergies, Woodall said, the new company expects to see $400 million in savings, driven primarily by combining "issuing and acquiring capabilities from both companies, technology integration as we drive efficiencies in technology and data center costs and corporate costs through functional alignment of the combined company." Yet later he added:[T]here's a lot of innovation going on. Cumulative Growth of a $10,000 Investment in Stock AdvisorFIS Acquires Worldpay: Everything Investors Need to Know @themotleyfool #stocks $FIS $VNTV $FISV $FDC $SQ We’re here to help. Let's conquer your financial goals together...faster. Personal Finance Your experience is our top priority. This deal probably better positions the new company to meet these outside threats than they would have fared separately. So what we saw on the combination was really this end-to-end innovation we've been discussing on this call, and the ability to be able for our FIs [financial institutions] to gain access to world class merchant acquiring to be able to leverage data in very unique ways, to be able to drive other products with a much faster speed to market, and that's been a very consistent theme that we've talked about.These comments, made near the conclusion of the conference call, paint a more honest picture.
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