GTR In Talks To Acquire Business Merchant FIS.N

Private equity firm GTCR LLC is in advanced discussions to acquire a majority stake in Fidelity National Information Services Inc (FIS.N).

The deal for the merchant business of payment processing company is reportedly valued between $15 billion and $20 billion, making it the largest in GTCR’s history.

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This acquisition would allow FIS to address the challenges arising from its $43 billion acquisition of Worldpay in 2019, as the majority of FIS’s merchant business consists of Worldpay.

GTCR’s offer is said to have prevailed over rival firm Advent International. FIS intends to retain a minority stake in the merchant business.

GTCR plans to finance the acquisition through a combination of equity financing and borrowing, with an equal split between the two methods.

However, it’s important to note that the deal is still being negotiated and could potentially fall apart before reaching a final agreement.

GTCR, FIS, and Advent have declined to comment on the matter.

Considering the expensive and limited debt financing options and economic uncertainties affecting dealmaking, a leveraged buyout of this scale would be a significant achievement.

Data from Dealogic shows that private equity-led buyouts in the first half of 2023 totaled $196.7 billion, marking a 59% decline compared to the same period the previous year.

In FIS’s strategic breakup plan, the company would retain its core processing systems business, facilitating transactions among banks and financial institutions, as well as its capital markets division serving investment firms.

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This decision to conduct a strategic review and divest its merchant business came after pressure from hedge funds D.E. Shaw and Jana Partners.

Earlier this year, FIS announced a $17.6 billion write-down related to the Worldpay acquisition.

Analysts attribute FIS’s integration challenges with Worldpay to underinvestment and operational missteps.