With a Hurdle Cleared, FIS Expects to Close $43 Billion Worldpay Deal in the Third Quarter

Fidelity National Information Services Inc. (FIS) on Tuesday said it expects to close its colossal $43 billion acquisition of payment processor Worldpay Inc. in the third quarter following a Federal Trade Commission ruling.

The merger, announced in March, would create a processing colossus with payments services ranging from merchant processing, e-commerce, faster payments, and core processing for banks and credit unions.

Previously FIS said only that it expected the deal to close in 2019’s second half. But the companies received notification April 26 from the FTC that the proposed acquisition cleared its Premerger Notification Program, which evaluates mergers for potential anti-trust issues prior to a deal’s closing.

“This gives us strong confidence to close the deal in Q3,” Gary Norcross, FIS chairman, president, and chief executive, told analysts during his company’s first-quarter earnings call Tuesday morning. “Until closing, we will continue to operate as separate companies.”

Still, some effort to evaluate how the two companies might meld their operations has begun. “As we get through the regulatory approval process, the early release is an important milestone,” Norcross said. “We’ve been able to get some of our groups together.” The cultural alignment between FIS and Worldpay is very strong, he said.

There’s only so much FIS and Worldpay can do now, Norcross says. “As we do talk across the operating units, we’re getting more and more comfortable where assets exist on either side of the companies.” He envisions multiple Worldpay products having applicability among FIS’s existing client base, and vice versa. The combined company will generate $12.3 billion in annual revenue, FIS says.

For the quarter, Jacksonville, Fla.-based FIS reported $2.06 billion in revenue, a 0.4% decrease from $2.07 billion in the year-ago quarter. Net earnings of $149 million fell 22% from $190 million in 2018’s first quarter. The dissolution of a joint venture in Brazil and divestitures in 2018 affected revenue, FIS said.