Fidelity National Information Services (NYSE:FIS) (FIS) has reached an agreement to sell a 55% stake in its merchant business, Worldpay (LSE:WPG), to private equity firm GTCR for $11.7 billion.
The move comes as FIS aims to reduce its debt and address investor pressure in line with a strategic review prompted by hedge funds DE Shaw and Jana Partners.
The deal values Worldpay (LSE:WPG), an American payment processing company and technology provider, at $18.5 billion.
FIS had initially acquired Worldpay for $43 billion in 2019 to strengthen its merchant business. However, the market share of new fintech startups eroded FIS' position, leading to considerations of a spin-off.
The deal will leave FIS with $10 billion in debt after its closure, as the company had a total debt of $20 billion as of March.
Proceeds from the transaction will be used for share buybacks, according to FIS. GTCR has also committed an additional investment of up to $1.25 billion in Worldpay, which will be led by Charles Drucker, former CEO of GTCR and a key figure in the sale of Worldpay to FIS in 2019.
The stake sale will enable FIS to focus on its core processing systems business and its capital markets unit, serving investment firms.
FIS shares were down around 1.8% on Thursday morning following the announcement of the deal.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas