FIS reveals plans to spin off merchant business unit
US banking and payments technology giant FIS has announced plans to spin off its Merchant Solutions business as it looks to “strengthen its strategic and operational focus, capitalise on growth opportunities and unlock shareholder value”.
FIS announces plans to spin off its Merchant Solutions business
FIS says uncoupling its merchant business, which mainly consists of payments software arm Worldpay, will give the separate companies “greater strategic flexibility and operational focus”. The firm adds both companies will maintain a “strong commercial relationship”.
According to a report by Reuters, the firm will also consider acquisition proposals for the spun off business. Worldpay was acquired by FIS for around $43 billion back in 2019.
Current FIS CEO Stephanie Ferris joined the company via that Worldpay acquisition. Ferris was appointed as president in February last year and took over as CEO from Gary Norcross on 1 January 2023. The company has since embarked on a cost-saving job cutting spree, axing thousands of jobs following a slump in the company’s share price over 2022.
Speaking on the move, Jeffrey Goldstein, chairman of the board at FIS, says: “In evaluating a broad range of alternatives as part of our previously announced comprehensive assessment of FIS’ strategy, businesses, operations, and structure, FIS management and the Board concluded that the spin-off of Worldpay will unlock shareholder value by improving both companies’ performance, enhancing client services, and simplifying operational management.”
The Merchant Solutions business will operate as Worldpay upon completion of the spin-off, with former Worldpay CEO Charles Drucker set to take the reins once more. Drucker has also been named as a strategic advisor “to aid with separation and ongoing business review”.
FIS says it expects the spin-off to be completed within the next 12 months.
The uncoupling of the firm’s merchant solutions business would leave FIS with its core banking processing systems business, which makes up around 46% of its revenue, and its capital markets division, which makes up about a quarter of revenues.
