Worldpay ripe for £6bn float
By Peter Campbell
THE company that processes almost half the credit card transactions in Britain is to list in a £6bn float.
Worldpay will raise £890m by selling shares on the London Stock Exchange next month.
The firm processes payments made online, in shops and over the phone – with its largest customers including British Airways, Sony and Google. Its technologies also include contactless payments as well as the recently launched Apple Pay, where users can buy items simply by touching their iPhone to a card machine.
Its operations span 146 countries, operating in 126 currencies.
The company was founded by RBS but the lender was forced to sell it for £1.7bn following its £47bn state bailout in the jaws of the financial crash.
Current private equity owners Bain Capital and Advent International have invested more than £1bn since taking over but still stand to make sizable windfalls from the float.
The float is the largest on the London exchange since commodities titan Glencore listed in 2011, and will catapult Worldpay straight into the FTSE 100.
Some 200 senior staff could share a £100m windfall from the shares, while the company’s 4,500-strong workforce will also benefit from the deal. But the decision to list – which comes after snubbing a £6.6bn bid from a French rival – could have been delayed if the US Federal Reserve hiked interest rates.
The Fed’s decision to hold rates, announced on Thursday, was taken into account by Worldpay’s board, which met to approve the float plans later that evening.
It is thought the rate decision could pave the way for other megafloats that may have been put on ice until after the announcement.
In spite of a promise of a wave of deals following the General Election result, market confidence has been knocked by Chinese slowdown and worries over the state of the global economy.
Chief executive Philip Jansen said the IPO ‘will enable us to access new capital for growth, augment our global proposition and further enhance our ability to serve cus- tomers across the world’. Its private equity backers said they have invested around £400m in technology and another £300m in expanding the business.
Chairman Sir Mike Rake, who was brought into the business to help prepare it for a float earlier this month, described the firm as a ‘pioneer’ in card payments.
He said Worldpay ‘is led by an experienced management team with a clear understanding of the market and its trajectory and has demonstrated an impressive track record of sustained growth’. But floating the firm was not the only option facing the board. Last week it received an offer for £6.6bn from French group Ingenico. But there were fears that the company, which would have doubled in size following the deal, had overstretched itself with the offer.
Reports said that Bain, one of Worldpay’s backers, had worries about Ingenico’s ability to fund the transaction. Shares in Ingenico fell by around a third after reports of the offer emerged – and jumped after Worldpay batted away the proposal by announcing its intention to float yesterday.
Worldpay’s latest financial results, covering the first six months of 2015, showed revenue and profits growing by 13pc to £465.7m and £182.6m respectively. It processes around 11.5bn transactions annually, worth around £370bn in total.
Of its 400,000 global customers, some 377,000 are small and medium sized businesses. Worldpay said it would use the money raised from the flotation to reduce debts.