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Vantiv, Worldpay reach merger agreement

The boards of directors of Vantiv Inc. and Worldpay Group PLC have reached agreement on the terms of a recommended merger of Worldpay with Vantiv and its subsidiary, Vantiv UK.

This combination will result in the creation of a global payment provider with the ability to power omnicommerce, and with comprehensive products and capabilities spanning traditional merchants, integrated payments, and global e-commerce, a company press release said.

Under the terms of the merger, Worldpay shareholders will be entitled to receive 55 pence (71 cents) cash for each Worldpay share held and 0.0672 of a new Vantiv share. Vantiv and Worldpay shareholders are expected to own approximately 57 percent and 43 percent, respectively, of the combined company's shares upon closing.

Worldpay shareholders also will be entitled to receive an interim dividend of 0.8 pence (10 cents) per Worldpay share, and a special dividend of 4.2 pence (55 cents) per Worldpay share, conditional on completion of the merger.

The transaction will create a company with an enterprise value of 22.2 billion pounds ($28.8 billion). It contemplates a premium of approximately 34 percent to the Worldpay six-month volume weighted average price, and ascribes Worldpay an enterprise value of approximately 9.3 billion pounds ($12 billion).

"This is a powerful combination that is strategically compelling for both companies," Vantiv President and CEO Charles Drucker said in the release. "It joins two highly complementary businesses, and it will allow us to achieve even more together than either organization could accomplish on its own. Our combined company will have unparalleled scale, a comprehensive suite of solutions, and the worldwide reach to make us the payments industry global partner of choice."

According to the release, the strategic rationale for the merger is the unique combination of scale and global presence it creates. This will give the companies the ability to:

  • capitalize on strategic and high-growth verticals;
  • integrate a technology platform built for innovation and to manage complexity;
  • project a powerful business model and financial profile;
  • deliver significant value creation through cost synergies; and
  • capitalize on respective strengths to drive revenue opportunities.

Following completion of the merger, Cincinnati, Ohio, will become the combined company's global and corporate headquarters and London will become its international headquarters. The combined company will use the Worldpay name.

The combined company will be led by Charles Drucker. The merger is expected to close in early 2018, the release said.