Three years ago, Fidelity National Information Services (FIS) made a move that has proven to be a major misstep. In a massive $43 billion deal, the company acquired payment processing company Worldpay and was hit with fairly immediate buyer’s remorse as both companies’ stocks dropped by 50%.
But like any savvy player in the fintech world, when FIS found itself in a disadvantageous position, it took decisive action to make things better. In one of the first actions taken by Stephanie Ferris, the company’s newly appointed Chief Executive officer, FIS and Worldpay will no longer operate as one entity; within the next year, Worldpay will be spun off into an independent merchant business. As the new incarnation of Worldpay will continue its commercial relationship with FIS but enjoy enhanced strategic flexibility, the spinoff is widely seen as a shrewd move for both companies.
“In evaluating a broad range of alternatives as part of our previously announced comprehensive assessment of FIS’ strategy,” FIS Chairman Jeffrey A. Goldstein said in a press release, “businesses, operations, and structure, FIS management and the Board concluded that the spin-off of Worldpay will unlock shareholder value by improving both companies’ performance, enhancing client services, and simplifying operational management.”
