US-based financial technology group FIS has said it will spin-off Worldpay, the payments business it acquired for $43bn just four years ago, after it failed to successfully integrate the two companies.
The Jacksonville, Florida-based company, formally known as Fidelity National Information Services, said the tax-free split would unlock shareholder value. That claim contradicts the arguments it made in 2019 when it combined the groups to create one of the largest providers of financial infrastructure that underlie the bank payments system.
FIS’s decision to break up the company follows criticism by activist shareholder DE Shaw, which demanded it reviews its business strategy, including considering undoing the 2019 deal.
“The pace of disruption in payments is rapidly accelerating, requiring increased investment in growth and a different capital allocation strategy for our Merchant Solutions business,” said Jeffrey Goldstein, chair of FIS’s board of directors.
“This spin-off will create two industry-leading, publicly traded companies with sharper focus and increased agility, each well-positioned to capitalise on the significant value creation opportunities ahead in their respective markets.”
Charles Drucker, formerly the chief executive of Worldpay, has been appointed as a strategic adviser to help with the spin-off and will be reinstated to his previous role when it is completed. Stephanie Ferris will continue to be the chief executive of FIS.
FIS shares were down more than 14 per cent in pre-market trading on Monday.