Merger would boost FIS revenue from $8.4 billion to about $12.3 billion and make it the city's biggest company.
Fidelity National Information Services Inc., or FIS, announced a $34 billion merger agreement Monday that will make the company Jacksonville’s largest.
FIS, which provides technology services for financial institutions, agreed to buy Worldpay Inc., a Cincinnati-based payments technology company.
The merged company will retain the FIS name and continue to be headquartered in Jacksonville, where it employs nearly 1,400 people.
The two companies combined had $12.3 billion in revenue last year, and FIS expects to reach $15 billion in three years after the merger.
FIS was spun off from Jacksonville-based Fidelity National Financial Inc. in 2006 and has grown with large acquisitions in the past.
“As we have discussed over the years, mergers and acquisitions have been and will continue to be a key component of our overall strategy,” CEO Gary Norcross said in a conference call with analysts.
“This has never been more at the forefront of our thinking than today.”
Combining the financial technology of the two companies will allow them to remain as leaders in the industry, Norcross said.
“The size and scale of our combined community will allow us to accelerate the future of finance and commerce,” he said.
One significant opportunity for FIS in the merger is Worldpay’s payment services for e-commerce transactions, Norcross said.
“Clearly e-commerce is the highest growth area and Worldpay is the No. 1 global e-commerce provider,” he said.
As in any merger, FIS expects to save money with cost cuts as it integrates the two businesses. Chief Financial Officer Woody Woodall said the company expects $400 million in annual “cost synergies” after the merger, but he did not give specific cuts.
FIS has more than 47,000 employees in 177 global facilities and Worldpay, which also operates globally, has more than 8,000.
Norcross will remain chairman, president and CEO of FIS after the merger. Worldpay CEO Charles Drucker will become vice chairman of the board of directors.
Worldpay stockholders will receive 0.9287 shares of FIS stock and $11 in cash for each of their shares. Current FIS stockholders will end up with 53 percent of the combined company.
Based on FIS’ closing price of $108.88 a share Friday, the deal is valued at $112.12 for each Worldpay share.
Worldpay, which has about 300 million outstanding shares, closed at $98.68 Friday.
The deal was announced before the stock market opened Monday.
FIS, with $8.4 billion in revenue last year, is already a Fortune 500 company. The merger would move FIS up the list and slightly ahead of Jacksonville-based railroad company CSX Corp., which had $12.25 billion in 2018 revenue.
FIS and Worldpay expect to close the merger in the second half of this year.