July 5, 2017
By John Stewart
In a play for scale in a rapidly expanding e-commerce market, Vantiv Inc. on Wednesday agreed to buy the United Kingdom-based processor Worldpay Group plc for approximately $9.9 billion. JPMorgan Chase & Co., which had also expressed interest in Worldpay, has withdrawn from the bidding.
The boards of the two companies announced an “agreement in principle” calling for Vantiv to pay almost $5, at current exchange rates, for each Worldpay share. That figure includes a dividend payment of about 6 cents per share. The deal values Worldpay at a premium of about 20.7% to the company’s closing price on June 30, before takeover speculation lifted its shares.
As recently as Tuesday, Chase had been a contender to buy Worldpay, leading the parties to release a statement announcing that the London-based processor was being pursued by both Vantiv and Chase. But the megabank later told Bloomberg it had dropped its bid.
The deal will bring considerable processing heft to Vantiv, already one of the largest U.S. merchant acquirers and transaction processors. It will particularly add economies of scale for Vantiv in the rapidly expanding global market for e-commerce transactions. “The potential merger creates a scale world-class payments group in a dynamic market, with deep payments capabilities, product and vertical expertise, and strong distribution channels to serve merchants around the world in the global e-commerce market, and in-store and online in the U.K. and U.S. markets,” the two companies said in a joint statement.
Expanded e-commerce business, as well as international exposure, could be critical for Vantiv. “For Vantiv this is a big move,” Jared Drieling, director of business intelligence at The Strawhecker Group, Omaha, Neb., tells Digital Transactions News. “If you look at what Vantiv has today, they lack an international capability.”