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Vantiv and JPMorgan


U.S. credit card processor Vantiv, has offered to buy British based online payment firm Worldpay, for a large sum of $10 Billion. This deal between the two giants is expected to lead to more extensive deals on a global scale.

Payments companies have a target painted on them, by the credit card companies and banks, which are seeking to earn profits by switching from cash transactions to payment through smartphone or other mobile devices.

Worldpay’s shares rose by almost 28% when it received bidding approaches from both Vantiv and JPMorgan. JPMorgan is the Worldpay’s corporate broker.

While the U.S. bank had also shown a preliminary interest in buying Worldpay, it is not planning on make a bid to rival the one made by Vantiv.  According to the terms agreed upon, Vantiv is supposed to pay 55 pence in cash in addition to 0.0672 of the new Vantiv share and also a 5 pence cash dividend for each Worldpay share, which totals 385 pence per share.

After the deal the shareholders in Worldpay will own approximately 41% of the new company. The company will now be under control of the Chief of Vantiv, Charles Drucker and the current CEO of Worldpay, Philip Jansen.

Banks have constantly been trying to buy and accumulate more advanced technology. Companies like PayPal and Worldpay have gained the banks’ interest as consumers nowadays prefer online shopping and cashless transactions over the current method.

E-commerce payments revenue of Worldpay, which until today accounted for more than a third of its total generated revenue, rose by 21.7%, to a net worth of 386.6 million pounds, fuelled by successful business ventures and its particular demand in global retail market.

Vantiv will profit largely from this deal by gaining international e-commerce capabilities, through the acquisition of Worldpay. Apart from that it would make Vantiv able to cross-supply to its U.S. market of clients. Worldpay will also benefit by this deal, as the increased exposure to the U.S. would expand its market in the country, which already generates more than 25% of its revenue.