Global Payments Inc. (GPN, Financial) has signed definitive agreements involving a strategic divestiture and acquisition that aim to reshape its business landscape. The company plans to sell its Issuer Solutions segment to FIS for $13.5 billion while concurrently acquiring Worldpay from GTCR and FIS at a net purchase price of $22.7 billion, with the total value reaching $24.25 billion when including anticipated tax assets of $1.55 billion.
This series of transactions will see Global Payments transforming into a leading merchant solutions provider with a substantive global presence, serving over six million customers across 175 countries. With over 94 billion transactions and $3.7 trillion in volume processed annually, the company aims to enhance its capabilities and market reach.
The financial terms include a 12.3x adjusted EBITDA multiple valuation for Issuer Solutions and an 8.5x multiple for Worldpay, factoring in synergy benefits. The projected synergies include $600 million in annual operational cost reductions and at least $200 million in revenue enhancements over a three-year period post-closing.
In a move to fortify its offerings, Global Payments and FIS will cultivate a commercial partnership, providing a comprehensive suite of solutions across core banking, treasury management, and other critical services worldwide.
Looking ahead, Global Payments anticipates achieving pro forma 2025 annual adjusted net revenue and EBITDA of approximately $12.5 billion and $6.5 billion, respectively. The company plans to preserve its investment-grade credit ratings through the conclusion of these transactions and aims to lower its adjusted net leverage to 3.0x within 18 to 24 months.
The strategic divestiture and acquisition will be financed through the proceeds from the Issuer Solutions sale, existing cash reserves, and new debt. As part of the deal, GTCR will acquire shares in Global Payments at $97.00 each, equating to roughly 15% of the company's outstanding shares on a pro forma basis. These transactions are projected to close in the first half of 2026.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 30 analysts, the average target price for Global Payments Inc (GPN, Financial) is $124.33 with a high estimate of $194.00 and a low estimate of $85.00. The average target implies an upside of 47.81% from the current price of $84.12. More detailed estimate data can be found on the Global Payments Inc (GPN) Forecast page.
Based on the consensus recommendation from 37 brokerage firms, Global Payments Inc's (GPN, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Global Payments Inc (GPN, Financial) in one year is $124.46, suggesting a upside of 47.96% from the current price of $84.12. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Global Payments Inc (GPN) Summary page.
