Based on the first three quarters of 2023, PayTech acquisition activity is expected to reach 143 acquisitions in 2023, a 26% drop from 2022’s levels. Payment companies accounted for 38% of PayTech acquisitions in 2023, a six percentage point increase compared to 2022 levels. Overall there have been 1,196 PayTech acquisitions over the past seven years.
WorldPay, which provides electronic payment and banking services, was the largest PayTech acquisition in Q1-Q3 2023, which was acquired by GTCR, a private equity firm, for $18.5bn. As part of the deal, which is the largest ever for GTCR, FIS will receive upfront proceeds of $11.7bn and keep a 45% stake in the new entity, according to a statement. The transaction would effectively undo FIS’s $43bn acquisition of Worldpay in 2019, after the unit lost market share to traditional competitors and new financial technology startups. In December, FIS launched a strategic review under new CEO Stephanie Ferris, after facing pressure from activist hedge funds D.E. Shaw and Jana Partners. In February, FIS said it would consider a spinoff of the merchant services unit, which processes transactions for companies, after taking a $17.6bn write-down. FIS plans to use the proceeds from the deal to pay down debt and buy back shares from existing shareholders. The deal is expected to close by the first quarter of 2024.