Tech Transformers

Vantiv seals $10.4 billion merger with Worldpay

Key Points
  • Vantiv has agreed to acquire Worldpay for £8 billion ($10.4 billion).
  • Vantiv will offer cash and stock for Worldpay shares.
  • The combined company will be valued at £22.2 billion or $28.8 billion.
A Worldpay Group Plc card payment machine prints a receipt in a retail outlet.
Chris Ratcliffe | Bloomberg | Getty Images

U.S. credit card processing company Vantiv agreed on Wednesday to buy Worldpay, the U.K.'s largest payment processing company, for £8 billion ($10.4 billion).

Worldpay said that for each of its shares, Vantiv offered 55 pence in cash, 0.0672 of a new Vantiv share, an interim dividend of 0.8 pence per Worldpay share, and a special dividend of 4.2 pence per Worldpay share.

The combined company will be valued at £22.2 billion or $28.8 billion.

Worldpay shareholders will own approximately 43 percent and Vantiv shareholders will own approximately 57 percent of the combined company.

The combined group will be led by Vantiv Chief Executive Charles Drucker as executive chairman and co-CEO. Current Worldpay CEO Philip Jansen will be co-CEO of the joint group. Vantiv Chief Financial Officer Stephanie Ferris, will remain CFO of the combined group. The board will consist of five Worldpay and eight Vantiv directors.

Cincinnati, Ohio will become the company's global and corporate headquarters and London, U.K. will become its international headquarters.

Vantiv beats out JPMorgan Chase for Worldpay merger
Vantiv beats out JPMorgan Chase for Worldpay merger

Worldpay shares will be delisted from the London Stock Exchange while the new Vantiv shares will be listed on the New York Stock Exchange. Vantiv will also seek a secondary listing for its new shares on the London Stock Exchange.

Vantiv first announced its intention to buy Worldpay in July.

"The boards of Vantiv and Worldpay recognize the attractive opportunity which exists for the merger to bring together global scale, integrated technology, and diverse distribution to create a market leader in payment technology to power omni-commerce," both companies said in a regulatory filing.

Consolidation is continuing to happen in the payments space amid a drive to lower costs and as large players face competition from nimble start-ups. In July for example, Mastercard agreed to buy 92.4 percent of VocaLink Holdings for about $920 million.

Speaking hypothetically, if the merger happened at the end of December 2016, the combined group would be processing around $1.5 trillion in payment volume, according to the companies. It would also see 40 billion transactions in 146 countries and 126 currencies, with a combined net revenue of over $3.2 billion, on a pro forma basis.

Credit technology firm Vantiv to merge with Worldpay in $9.94 billion deal
Credit technology firm Vantiv to merge with Worldpay in $9.94 billion deal

The combined company is expected to incur one-off restructuring and integration costs of approximately $330 million, the majority of which will be incurred by the end of the second year following completion of the merger.

A regulatory filing revealed that discussions between Worldpay and Vantiv have been held at various times over the past two years. "Detailed discussions" between the two firms took place in January and February 2016.

Barclays and Goldman Sachs acted as advisors for Worldpay and Morgan Stanley and Credit Suisse acted for Vantiv.