GTCR, a Chicago based private equity firm, is currently engaged in advanced negotiations to acquire a majority stake in the merchant business division of Fidelity National Information Services (FIS), a prominent payment processing company. The proposed transaction is expected to value the division between $15B and $20B.
The development is part of FIS’s broader strategic plan to shift its focus away from non-core operations and reverse the adverse effects of its $43B acquisition of Worldpay in 2019. The merchant business segment of FIS primarily consists of Worldpay, which is responsible for processing payments on behalf of various companies.
FIS’s stock performance has been subpar over the past year, declining by 36%. As a result, the company has faced significant pressure from investors, including The D. E. Shaw Group and JANA Partners, who are advocating for a more streamlined, pureplay strategy, as well as for the divestment of non-core business units.
The transaction will enable FIS to refocus on its core processing systems business. FIS’s decision to divest aligns with the strategies adopted by other conglomerates such as GE, Johnson & Johnson, Kellogg Company, and Toshiba, who have successfully returned to their core competencies by divesting non-core assets.