A bout of mergers and acquisitions in the financial-services industry continues to put Durango’s best-known and most successful startup through a revolving door of ownership changes.
Last week, Fidelity National Information Services Inc., also known as FIS, announced it would acquire Worldpay Inc., which had been the latest corporate home for Mercury Payments Systems, for about $35 billion in cash and stock.
The merged company, operating as FIS, will be based in Jacksonville, Florida. FIS executives estimate the merger will be able to generate free cash flow of nearly $4.5 billion in three years following the deal’s closing.
The deal, expected to be finalized in the second half of 2019, would create a global giant in payments and back-office financial services in a bid to reach more customers as transactions move increasingly online.
Matt Taylor, who served as CEO of Mercury Payment Systems during its startup and formative years in Durango, said it is too early to determine what the acquisition of Worldpay by FIS will mean for the consumer payment-processing division that began and remains in Durango.
The Durango office, located near the Durango Mall, employs about 400 people.
“Right now, we haven’t examined anything other than to get to know each other at a relationship level,” he said of discussions with FIS executives.
However, Taylor said little overlap exits in the financial services offered by FIS and Worldpay.
FIS mainly provides software for banking functions such as electronic checking, treasury management, lending management and other digital banking services. Worldpay specializes in point-of-sale online payment services for businesses.
Taylor said FIS does have a small division involved in integrated payments, an area of financial services first pioneered by Mercury.
Recruiting employees to small-town Durango, Taylor said, has not been a problem.
“We really pride ourselves on the people and the community were able to work with here in Durango,” he said. “We’ve developed a good relationship with Fort Lewis College, and Durango attracts a diversity of people that is helpful to our integrated payments business.”
Integrated payments software helps businesses track sales and information about sales and customers and integrates that data with inventory management, online ordering, marketing, bookkeeping and other back-office business functions.
Durango’s office of what is now FIS handles software development, customer support and sales, including what was the primary call center for Worldpay.
“We have a long history of solid operations in Durango, and that’s one of the reasons we were purchased,” Taylor said.
The acquisition of Worldpay by FIS is but the latest ownership change for one of Durango’s major employers that began life as Mercury Payment Systems in 2001.
Mercury Payment Systems first sold a controlling interest in its operation to SilverLake, a private equity firm, in May 2010.
Vantiv acquired Mercury Payment Systems for $1.65 billion in May 2014.
In January 2018, Vantiv acquired London-based Worldpay Group PLC, for $10.6 billion and took on the Worldpay name.
Taylor, in 2003, became one of the first employees hired by Mercury founders Jeff and Marc Katz, and he became Mercury’s CEO in 2009.
The Katz brothers formed Mercury in 2001. The company’s first office was in the Bodo Industrial Park offices of Durango Computer Classroom.
For FIS, the acquisition of Worldpay, which is headquartered in Cincinnati, will be its largest purchase since it acquired rival financial software company Sungard for $5.1 billion in cash and stock in 2015.
Under the deal, shareholders of Worldpay will receive 0.9287 in FIS shares and $11 in cash for each share of Worldpay, a 32% premium to Worldpay’s average price over the past three months.
FIS shareholders will own about 53% of the company and Worldpay shareholders will own about 47%.
The deal will give FIS access to the 40 billion e-commerce and other types of transactions Worldpay processes yearly. FIS offers services in 130 countries, while Worldpay operates in 146 countries.
Taylor said the merged company can add value to its financial services software by integrating the banking specialization of FIS with Worldpay’s expertise in integrated payments and point-of-sale services it offers businesses.
parmijo@ durangoherald.com
