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Instant Analysis: Vantiv to Acquire the U.K.'s Worldpay Group

What happened?

Vantiv (NYSE: VNTV) has struck a deal to acquire a major peer across the Atlantic Ocean. It agreed, in principle, to a deal worth roughly 7.7 billion British pounds (just under $10 billion) to purchase British payment-processor Worldpay Group in a cash-and-stock deal.

The announcement came on the heels of Worldpay's disclosure that it had received buyout offers from both Vantiv and JPMorgan Chase (NYSE: JPM). Following the announcement of the Vantiv/Worldpay agreement, however, JPMorgan Chase said it would not continue its chase for the British company.

According to the terms of their agreement, Vantiv is to pay 55 pence ($0.71) in cash and nearly 0.07 a share of newly issued Vantiv stock per each Worldpay share. The U.K. company's investors would also receive a special 5 pence ($0.06) per-share dividend. All told, this would amount to 3.85 pounds ($4.98) per share.

After the merger is effected, current Worldpay shareholders would own roughly 41% of the combined company. This will continue to be known as Vantiv and trade on the New York Stock Exchange.

As per U.K. law, Vantiv is required to formally commit to its offer by Aug. 1. Also, the completion of the merger is subject to shareholder approvals and the permission of the relevant regulatory authorities.


Does it matter?

The deal is a nice David-like win, particularly considering that Vantiv effectively managed to beat out the financial Goliath that is JPMorgan Chase. It's actually the latest in a string of Vantiv acquisitions -- earlier this year, the company scooped up e-payments solutions provider Paymetric for an undisclosed amount, and late in 2016, it signed a nearly $407 million deal to buy the American operations of Canadian peer Moneris Solutions.

Much of the Worldpay buy will be financed with Vantiv stock, which puts much less of a strain on the American company's coffers. For its money, it's acquiring a top name in modern European payment processing to add to its growing list of complementary assets. I consider this a valuable victory for Vantiv.

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Eric Volkman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.