Replies to post #122152 on Savvy Trades and Investments

[researcher59]

GPN -11.38 to 72.72 after announcing a major acquisition. Evidently investors don't like the deal despite the reaffirmed FY25 guidance.

briefing -

Global Payments announces agreements to acquire Worldpay (FIS) and divest issuer solutions; provides Q1 guidance roughly in-line; reaffirms FY25 guidance (84.12 ) :
Co announced definitive agreements to divest its Issuer Solutions business to FIS for $13.5 billion and acquire Worldpay from GTCR and FIS for a net purchase price of $22.7 billion, or total value of $24.25 billion including $1.55 billion of anticipated tax assets. This reflects a 12.3x adjusted EBITDA multiple for Issuer Solutions and an 8.5x adjusted EBITDA multiple for Worldpay on a net basis inclusive of run-rate synergies.
Co issues guidance for Q1 (Mar), sees EPS of $2.69 vs. $2.71 FactSet Consensus; sees Q1 (Mar) revs of $2.205 bln vs. $2.2 bln FactSet Consensus. Co reaffirms guidance for FY25 (Dec), sees EPS of $11.54-11.70 vs. $12.18 FactSet Consensus; sees FY25 (Dec) revs of $9.17-9.30 bln vs. $9.26 bln FactSet Consensus.
The proposed divestiture of Issuer Solutions and acquisition of Worldpay will occur simultaneously. The divestiture of Issuer Solutions to FIS will be executed for cash and FIS' stake in Worldpay. Global Payments will acquire the remaining stake in Worldpay from GTCR for a combination of cash and stock in Global Payments. The transaction is subject to customary cash, debt and working capital adjustments.
The cash consideration payable in Global Payments' acquisition of Worldpay will be financed with a combination of cash proceeds from the sale of Issuer Solutions and cash on the balance sheet and new debt raised. Global Payments has obtained committed bridge financing and plans to issue $7.7 billion of debt between signing and closing which will be used to replace the bridge commitment and refinance Worldpay's outstanding debt. GTCR will receive shares in Global Payments at a price of $97.00, representing approximately 15% of Global Payments' outstanding shares on a pro forma basis.
Leading Pure Play Commerce Solutions Provider: The transactions further simplify Global Payments' business, positioning the company as a leading pure play merchant solutions provider at scale with world class distribution channels serving many of the highest-growing areas in payments. Combined, Global Payments and Worldpay will provide cutting-edge solutions to more than 6 million customers across the merchant spectrum, while enabling 94 billion transactions and $3.7 trillion in payment volume annually.
Enhanced Financial Profile: The combined company is expected to have pro forma 2025 annual adjusted net revenue and adjusted EBITDA of approximately $12.5 billion and $6.5 billion, respectively, inclusive of run-rate expense synergies. Global Payments expects to retain its investment grade credit ratings at closing, and to reduce adjusted net leverage to 3.0x within 18 to 24 months.