Business Context and Reporting Period
This Form 8-K, filed on March 18, 2019, reports a material definitive agreement entered into on March 17, 2019, by Fidelity National Information Services, Inc. ("FIS") and Worldpay, Inc. ("Worldpay"). The filing details an agreement and plan of merger under which FIS will acquire Worldpay through a merger with a wholly-owned subsidiary, Wrangler Merger Sub, Inc.
Key Financial Metrics and Transaction Terms
The filing does not provide historical revenue, profit, cash flow, or margin data for either company. The primary financial metrics relate to the proposed transaction structure:
- Merger Consideration: Worldpay shareholders will receive 0.9287 shares of FIS common stock and $11.00 in cash for each share of Worldpay Class A common stock held.
- Financing: FIS has secured a commitment for a 364-day senior unsecured bridge term loan facility of up to $9.5 billion from Barclays, Goldman Sachs Bank USA, and Goldman Sachs Lending Partners LLC. This includes a $2.0 billion backstop facility.
- Termination Fee: The agreement stipulates a termination fee of $1 billion payable by the non-terminating party under specific circumstances, such as a change in board recommendation.
Material Changes and Governance
The transaction represents a significant change in FIS's corporate structure and market position. Upon completion:
- Board Composition: The FIS Board of Directors will expand to 12 members, comprising 7 current FIS directors and 5 Worldpay directors. The Worldpay CEO will serve as Executive Vice Chairman of the FIS Board for at least one year.
- Leadership: Gary A. Norcross will remain Chairman and CEO of the combined company.
- Equity Awards: Worldpay equity awards will be converted into FIS equity awards designed to maintain intrinsic value.
Guidance, Risks, and Conditions
The filing outlines several conditions precedent to the merger's completion, including shareholder approval from both companies, regulatory approvals (including the Hart-Scott-Rodino Act and the U.K. Financial Conduct Authority), and the absence of legal injunctions. The transaction is expected to close by March 17, 2020, extendable to June 17, 2020 under certain conditions.
Key Risks Disclosed:
- Failure to complete the transaction or achieve anticipated synergies.
- Integration difficulties, customer loss, or disruption of business operations.
- Regulatory hurdles or changes in laws affecting the financial services industry.
- Cybersecurity breaches and data loss risks.
- Unforeseen liabilities of either party.
The filing contains forward-looking statements regarding the transaction's benefits and integration, noting that actual results may differ materially due to various uncertainties.
Investor Verification Checklist
- Verify the final exchange ratio and cash consideration per share in the definitive joint proxy statement/prospectus (Form S-4).
- Confirm the status of regulatory approvals, particularly from the U.K. Financial Conduct Authority and antitrust authorities.
- Review the definitive terms of the $9.5 billion bridge facility and the plan for permanent financing replacement.
- Assess the specific integration timeline and synergy targets detailed in the upcoming proxy materials.
- Monitor shareholder voting results for both FIS and Worldpay.