GTCR’s Worldpay Acquisition Is The Largest Buyout Since Twitter

GTCR’s acquisition of Worldpay is reportedly set to be the largest buyout financing since last year’s Twitter deal.

Banks are preparing $9.4 billion of debt, including loans and bonds in dollars and euros, to back the private equity firm’s purchase of a 55% stake in the payment processor, Bloomberg reported Friday (July 7), citing unnamed sources.

The package will include $8.4 billion of leveraged loans and high-yield bonds and a $1 billion revolving credit facility, according to the report. It is expected to be offered to institutional investors as early as September.

The deal comes at a time when there have been few mergers and acquisitions (M&A) because of rising interest rates, and it’s the largest buyout financing since the $13 billion leant by Wall Street players to fund last year’s acquisition of Twitter, the report said.

Payments company FIS announced Thursday (July 6) that it is selling its majority stake in Worldpay to GTCR for $18.5 billion.

Related: EU: FIS gains okay for US$35B Worldpay buy

The news came days after reports that GTCR and buyouts firm Advent International were vying to pick up a majority stake in Worldpay.

FIS will retain a 45% stake in Worldpay, the merchant services business it acquired in 2019 for $43 billion.

“This transaction allows FIS to partially monetize our Merchant Solutions business at an attractive valuation and provides certainty for all stakeholders,” FIS CEO and President Stephanie Ferris said when announcing the deal. “It also allows us to simplify and drive greater focus on delivering innovative, next-generation financial technology and software solutions.”

GTCR’s acquisition of Worldpay comes after a first quarter in which global M&A activity dropped by 48% year over year.

As of March 30, M&A volumes for the first quarter were down by 70% in Europe, 44% in the United States and 29% in Asia Pacific.

With this decline, M&A activity slowed to its lowest level in more than 10 years due to rising interest rates, high inflation, geopolitical tensions, fears of a recession and the banking crisis.

More recently, there has been some activity in the payments and tech space. Visa said June 28 that it plans to acquire cloud-native issuer processing and core banking platform Pismo for $1 billion. Amedisys reported June 26 that it has agreed to a $3.3 billion merger with UnitedHealth Group, and Robinhood announced June 22 that it plans to acquire X1.