Fidelity National Information Services Inc., or FIS, announced Feb. 13 it will spin off its underperforming merchant payments technology as a separate company, just three and a half years after acquiring the business in a $43 billion deal.
Jacksonville-based FIS, which had been mainly a banking technology company, acquired Cincinnati-based Worldpay Inc. in 2019 to expand its reach into the merchants business.
However, results have been disappointing since the acquisition.
FIS also reported a fourth-quarter net loss of $17.4 billion, due to a noncash write-off of goodwill on its balance sheet related to the merchants business.
FIS reported total 2022 revenue of $14.5 billion, including $4.8 billion from the merchants unit.
The company’s banking technology unit had $6.7 billion in revenue and its capital markets technology business had $2.8 billion. FIS had other revenue of $286 million.
“In evaluating a broad range of alternatives as part of our previously announced comprehensive assessment of FIS’ strategy, businesses, operations, and structure, FIS management and the Board concluded that the spin-off of Worldpay will unlock shareholder value by improving both companies’ performance, enhancing client services, and simplifying operational management,” board Chairman Jeffrey Goldstein said in a news release.
Stephanie Ferris, who was chief financial officer of Worldpay before the acquisition, was promoted to CEO of FIS in December as the company launched a review of operations.
“I’m confident that today’s announcement advances our goal of optimizing for performance and returns while improving the satisfaction of our clients and colleagues,” Ferris said in the news release.
“We will create two more focused, agile companies that can pursue tailored strategies that are aligned with specific long-term growth opportunities,” she said.
Ferris was named CEO soon after FIS opened a new 12-story headquarters building in October at 347 Riverside Ave.
The company had 1,216 employees in Jacksonville and said it was 75% of the way to adding 500 more jobs it promised when it launched the headquarters project.
However, FIS has been cutting jobs as part of a plan to reduce costs.
Bloomberg News reported Feb. 2 that FIS had cut 2,600 jobs, including 1,000 contractors, but didn’t say where the jobs were located.
FIS said in its 2021 annual report it had more than 65,000 employees in 120 global locations, with more than 40,000 outside the U.S. The company would not comment on the Bloomberg report.
FIS said it will distribute shares of the merchants business to its stockholders, and the spinoff company will again take the name Worldpay.
Charles Drucker, who was CEO of Worldpay before it was acquired by FIS, will resume his role as chief executive.
FIS expects the spinoff to be completed within 12 months.