August 10, 2015
US private equity firm Blackstone and buyout fund Hellman & Friedman are reportedly poised to make a joint bid for UK-based payments processing company Worldpay. The report further stated that a Singaporean sovereign wealth fund could also team up with Blackstone and Hellman & Friedman in a joint bid.
Worldpay Limited is a payment processing company that provides payment services for mail order and Internet retailers as well as point-of-sale transactions. The company offers a range of services, including acquiring, gateway services, alternative payments, risk management and mobile payments. The company serves airline, digital content, gambling, retail, travel and video game clients. The company operates across 40 countries and processes over 75 payment types in more than 120 transaction currencies.
The majority of the stake in Worldpay is currently owned by Bain Capital and Advent. Back in 2013, Royal Bank of Scotland (RBS) had sold its remaining 20% stake in Worldpay for $248 million. RBS had first bought the company back in 2002 and has made it one of the leading payment processing businesses in the industry. Worldpay had spun off from RBS in 2010 in a $3-billion deal with Bain Capital and Advent International.
Earlier this year, Worldpay and CAN Capital—a leading player in alternative small business finance—formed a partnership to offer merchants fast, efficient access to working capital allowing them to grow and manage their businesses while preserving cash flow.
Last year in December, Worldpay officially closed its acquisition of SecureNet Payment Systems from private equity firm Sterling Partners. SecureNet provides cloud-based solutions to seamlessly integrate point-of-sale, mobile and e-commerce payments processing, inventory management and data analytics for merchants.
In the same month, Worldpay and Avalara formed a strategic partnership to provide payment and tax compliance services to online customers looking to trade globally. Avalara is a leading provider of cloud-based software that delivers compliance solutions related to sales tax, VAT and other transactional taxes. This partnership helps online businesses ensure that they are compliant with complex international sales regulations and are able to offer local payment methods to customers overseas.
The bid could value Worldpay at £6bn and is expected to be tabled within weeks, Sky News reported.
Advent and Bain are likely to decide by the autumn which route to take, with Worldpay set to be propelled straight into the FTSE-100 if they decide on a public listing.
The company recently appointed Barclays' Deputy Chairman Sir Mike Rake as the new chairman, replacing John Allan. The move signaled that the buyout houses favored a stock market listing and were keen to have management in place for when it starts trading as a public company, sources familiar with the matter told Reuters. It has also hired six investment banks to work on the float.
Worldpay owns a valuable stake in Visa Europe, which is in talks about a takeover by its US cousin, Visa Inc.