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Vantiv Buys Worldpay

According to published reports from Bloomberg and The Wall Street Journal, payment processing firm Vantiv Inc., has agreed to buy Worldpay Group Plc for 7.7 billion pounds ($9.9 billion), only two years two years after the U.K. financial technology firm went public.

The cash-and-share offer equates to 3.85 pounds a share, including a 5 pence per share dividend, the companies said in joint statement. The companies’ boards said they “see compelling strategic, commercial and financial rationale” for the combination as well as “substantial opportunities for cost synergies.”

“The acquisition is a great way for Vantiv to extend their reach into non-US markets and it balances WorldPay’s relatively limited presence in the US. I don’t that this is an indicator of a trend toward consolidation in the processor space,” said Aite Group analyst Thad Peterson. “Both companies have scale and there’s not a lot of advantage of increasing volume with a high volume low value product like processing.  It also gives Vantiv an opportunity to leverage their acquisitions of Mercury and Litle to expand their online presence globally.”

The deal also continues a trend of industry consolidation. Two months ago, First Data Corp. agreed to buy CardConnect Corp. for $750 million. Global Payments Inc. in December 2015 it was bought Heartland Payment Systems Inc. for $4.3 billion. In early 2016, Total System Services Inc. purchased TransFirst for $2.35 billlion.

Peterson and WorldPay are scheduled to be among the main participants at 2017 Mobile Payments Conference (MPC), Aug. 28-30, at the Swissotel in Chicago, Ill.

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