Breakingviews - Fintech giant’s bad wedding leads to happy divorce

Stacks of former U.S. President Abraham Lincoln on the five-dollar bill currency are seen at the Bureau of Engraving and Printing in Washington March 26, 2015. The 150th anniversary of Lincoln's assassination at Ford's Theatre in Washington is April 15.

NEW YORK, Feb 14 - Many mergers fail, but executives are rarely humble enough to admit it. At Fidelity National Information Services , purveyor of software to banks, it’s taken a new boss to bring on a shift. Appointed in December, Chief Executive Stephanie Ferris’s first major move at the helm is to undo a $43 billion deal the company made four years when it bought payments processor Worldpay.

Rabble-rousing shareholders D.E. Shaw and Jana Partners argue the deal shouldn’t have been done in the first place. They have a point – FISfor Worldpay than the combined companies’ market value today. Its shares have halved since the deal closed in July 2019. Worldpay currently brings in some 30% of FIS’s income, mostly by serving small businesses and restaurants. These are worlds apart from the staid financial institutions which patronize FIS’s core software business. The two parts of the company also have very different dynamics: 80% of FIS’s core business revenue is recurring, while payments revenue depends on transaction volumes and on acquiring new customers through M&A.

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