(Bloomberg) — Vantiv Inc., the largest U.S. merchant acquirer, agreed to buy e-commerce payments company Worldpay Group Plc for about 8 billion pounds ($10.4 billion).
The deal values each Worldpay share at 397 pence and the combined payment processing firm will seek a secondary listing on the London Stock Exchange, according to a statement on Wednesday. Following the deal, the company will be called Worldpay and have a pro forma enterprise value of about 22.2 billion pounds, with Vantiv shareholders owning about 57 percent of the stock.
Consolidation is accelerating in the fast growing payments industry as consumers increasingly switch to online purchases and electronic payments. Blackstone Group LP and CVC Capital Partners Ltd. agreed to buy Paysafe Group Plc for about $3.9 billion last week and Permira and Nordic Capital are among buyout firms considering bids for Nets A/S, the Danish payment-services provider.
Vantiv, which started in the 1970s as the payments-processing unit of Fifth Third Bancorp before being spun off in 2012, will gain greater exposure to Internet retailers and small businesses following the deal. The combined company will process about $1.5 trillion in payment volume and 40 billion transactions annually.
Vantiv expects the deal to result in annual recurring pretax cost synergies of about $200 million by the end of the third year following completion of the merger. It expects to incur one-off integration and restructuring costs of about $330 million, the majority of them by the end of the second year.
“The growth of e-commerce and the way consumers expect to transact is increasing complexity for businesses around the world,” Worldpay Chief Executive Officer Philip Jansen said. The “combination of scale, innovation, technology and global presence will mean that we can offer more payment solutions to businesses, whether large or small, global or local.”
Jansen will be co-CEO of the combined firm. Vantiv Chief Executive Officer Charles Drucker, who will lead the company, will be executive chairman and co-CEO.
The two companies first announced the deal last month. Worldpay was advised by Barclays Plc and Goldman Sachs Group Inc. while Vantiv worked with Morgan Stanley and Credit Suisse Group AG.