US payment processing giant Vantiv has submitted a formal offer to buy the UK rival Worldpay for around £8bn ($10.4bn). The offer marks the culmination of several weeks of disputes over terms, such as the relocation of UK staff following the merger.
Following the deal, which values Worldpay shares at $5.16, the merged company will be called Worldpay and headquartered in Cincinnati, where Vantiv is currently based. The combined company expects to process around $1.5trn in payments from 40 billion transactions annually, bringing in revenue of over $3.2bn per year.
Vantiv has grown into the US’ largest payment processing company by transaction volume, through a series of acquisitions
Vantiv has grown into the US’ largest payment processing company by transaction volume, through a series of acquisitions of firms such as Mercury Payment Systems and Moneris Solutions. Now, with the acquisition of Worldpay, the firm is seeking to broaden its reach in Europe.
Vantiv will also benefit from Worldpay’s share of the growing e-commerce market, since Worldpay specialises in processing online payments as well as those from traditional retailers. The surge in internet spending in recent years has seen firms such as Worldpay emerge as attractive takeover targets for established payment companies that are more accustomed to processing the non-virtual payments of large retailers. Earlier this month, Blackstone and CVC Capital agreed a $3.9bn buyout of Paysafe, while Permira and Nordic Capital are currently in talks to bid for Denmark’s Nets A/S.
Vantiv expects the merger will make the company annual savings of around $200m by the end of the third year, which will be offset against integration costs of roughly $330m, mostly over the first two years.