Global Payments reshapes with Worldpay acquisition and Issuer Solutions sale

ATLANTA - Global Payments Inc. (NYSE: GPN), a prominent provider of payment technology and software solutions with a market capitalization of $20.7 billion and impressive gross profit margins of 63%, announced a strategic move to reshape its business by divesting its Issuer Solutions segment to FIS for $13.5 billion and acquiring Worldpay from GTCR and FIS for a net purchase price of $22.7 billion. According to InvestingPro analysis, the company appears undervalued compared to its Fair Value, presenting a potential opportunity for investors interested in the payments sector. The transaction, expected to close in the first half of 2026, will position Global Payments as a leading commerce solutions provider with a focus on merchant services.

The company’s CEO, Cameron Bready, emphasized that the acquisition and divestiture are pivotal steps in Global Payments’ journey to become the preferred worldwide commerce solutions partner. The transaction will combine Global Payments’ and Worldpay’s complementary capabilities, expanding the company’s global reach and scale. InvestingPro data reveals the company’s strong financial foundation, with a healthy EBITDA of $4.4 billion and a robust free cash flow yield of 14% in the last twelve months. The combined entity will serve over 6 million customers, enabling around 94 billion transactions and processing $3.7 trillion in payment volume annually.

Global Payments anticipates that the move will significantly enhance its financial strength, with expected pro forma adjusted net revenue of approximately $12.5 billion and adjusted EBITDA of about $6.5 billion. The company’s current P/E ratio of 13.6 and PEG ratio of 0.21 suggest attractive valuations relative to its growth potential. For deeper insights into Global Payments’ valuation metrics and growth prospects, investors can access comprehensive analysis through InvestingPro, which offers exclusive financial health scores and detailed Pro Research Reports. The company also projects significant cost synergies of $600 million annually, with additional revenue synergies of at least $200 million expected within three years post-closing.

The acquisition of Worldpay is set to diversify Global Payments’ business mix, strengthening its ecommerce and integrated offerings, and expanding its capabilities to serve digital-native customers. Worldpay’s Payrix solution will complement Global Payments’ existing offerings, further solidifying its position in the integrated and embedded payments space.

As part of the transaction, Global Payments and FIS will establish a strategic partnership to offer a comprehensive suite of solutions globally. This partnership is expected to unlock new growth opportunities for both companies.

In financing the acquisition, Global Payments will utilize a combination of cash proceeds from the Issuer Solutions sale, cash on hand, and new debt. The company has secured committed bridge financing and plans to issue $7.7 billion of debt to facilitate the transaction.

Global Payments provided preliminary results for the first quarter of 2025, reporting adjusted net revenue of $2,205 million and adjusted earnings per share of $2.69, in line with its previous outlook. The company has demonstrated consistent financial performance, maintaining dividend payments for 25 consecutive years and achieving a return on invested capital of 5%. InvestingPro subscribers have access to additional insights, including 6 more exclusive ProTips and detailed analysis of the company’s financial health metrics. The company reaffirmed its full-year 2025 guidance for adjusted net revenue, adjusted operating margin, and adjusted earnings per share.

The transactions remain subject to regulatory approvals and customary closing conditions. This strategic move is based on a press release statement, aiming to streamline Global Payments’ focus on merchant solutions and drive growth through expanded capabilities and enhanced market access.

In other recent news, Global Payments Inc. reported a slight miss on both revenue and earnings per share estimates for the fourth quarter, with a conservative outlook for 2025 that also fell short of expectations. The company experienced a 1% miss on consensus revenue and a 0.3% shortfall on EPS, with a guidance for 2025 indicating a 2% and 1% miss on revenue and EPS, respectively. Despite these figures, Global Payments reported a 7% merchant revenue growth on a foreign exchange neutral basis, excluding dispositions. Analysts from Bernstein maintained a "Market Perform" rating with a $120 price target, while Mizuho Securities adjusted their price target to $100, citing concerns over stagnant merchant organic growth and potential foreign exchange headwinds. Evercore ISI initiated coverage on Global Payments with an In Line rating and an $85 price target, acknowledging the company’s ongoing transformation efforts. Meanwhile, Citi analysts reduced their price target to $135 but maintained a Buy rating, highlighting the company’s business transition and potential growth prospects. Additionally, Global Payments announced the resignation of its Chief Human Resources Officer, Andréa Carter, effective March 31, 2025, as she pursues a new opportunity. The company is expected to leverage its free cash flow to repurchase stock, aiming to enhance future optionality.

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