Germany-Based Wirecard Bids $9.4 Billion for WorldPay

August 31, 2015         By: Asif Imtiaz

Last week, Germany based payment processor Wirecard AG joined the bidding for U.K. based World Pay Ltd., with bid of US$ 9.4 billion.

Prior to Wirecard, WorldPay has received a joint proposal from private-equity bidders, including the Blackstone Group and the Hellman & Friedman.

According to a source close to the matter, instead of being sold, WorldPay may file for an IPO. The private bid from Wirecard would effectively help WorldPay to float its IPO with a valuation above $9.4 billion, which happens to be 17 times its projected EBITDA in 2016.

Interestingly, Wirecard’s own market valuation tanked to only $5.2 billion. It means that Wirecard would effectively be using a tactic called leveraged buyout as they are bidding for a company that has twice its own market valuation.

Advent International Corp. and Bain Capital jointly own WorldPay Ltd., which is one of the old-school online payment companies around that processes in-store, mobile and online payment transactions.

By contrast Munich, Germany based Wirecard AG has a substantial market share in online and mobile payments in Europe. Founded in 1999, Wirecard has built its reputation over the last two decades and worked with top companies in Europe including, ProSiebenSat.1 Media SE, Orange SA and Daimler AG’s mytaxi.

Advent International Corp. and Bain Capital bought WorldPay in 2010 from the Royal Bank of Scotland Plc for around US$ 2.7 billion and turned the company around over the last five years.

The Royal Bank of Scotland had to sell WorldPay in order to comply with the regulatory authorities for meeting conditions for banks who wanted to join the asset protection scheme offered by the UK Government. Last year, WorldPay reported to have $5.6 billion in revenue with an estimated EBITDA of $578 million.

The unnamed source told Bloomberg that WorldPay has also approached its banking partners for refinancing its current debt prior to taking the decision to go public, but so far no decisions were made.