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Friday 18 September, 2015

Worldpay Group Ltd

Intention to Float on the London Stock Exchange

RNS Number : 4781Z
Worldpay Group Limited
18 September 2015
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into or from the United States, Australia, Canada or Japan. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with any offer or commitment whatsoever in any jurisdiction. Investors should not purchase or subscribe for any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") expected to be published by Worldpay Group Limited (to be re-registered as Worldpay Group plc)  (the "Company" and together with its subsidiaries, "Worldpay" or the "Group") in due course in connection with the proposed admission of its ordinary shares (the "Shares") to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of London Stock Exchange plc (the "London Stock Exchange") (together, "Admission"). A copy of the Prospectus will, following its publication, be available from the Company's website and at the Group's registered office at The Walbrook Building, 25 Walbrook, London EC4N 8AF, United Kingdom, subject to applicable securities laws.

18 September 2015

Worldpay Group Limited

(to be re-registered as Worldpay Group plc)

Intention to Float on the London Stock Exchange

Worldpay Group Limited (to be re-registered as Worldpay Group plc) (the "Company" and together with its subsidiaries, "Worldpay" or the "Group"), a leader in global payments, today announces its intention to proceed with an initial public offering (the "IPO" or the "Offer"). Worldpay intends to apply for admission of its ordinary shares, issued and to be issued (the "Shares"), to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange plc's main market for listed securities (together, "Admission").

Worldpay is a leader in global payments, providing a broad range of technology-led solutions to its merchants, enabling them to accept 326 alternative payment methods[1], across multiple payment channels, nearly anywhere in the world[2]. Worldpay is one of the few global businesses able to offer functionality in most aspects of payment

acceptance, whether in-store, online or on a mobile device, by providing access to a global payments network through an integrated, agile, secure, reliable and highly scalable proprietary global payments platform.

The Group deploys this platform to optimise business outcomes for its merchants, including by: providing for acceptance of a greater number of payment types and opening access to new geographic markets; enabling its merchants to reduce the chances of losing a potential sale; allowing them to get a single view of key customer data; and increasing transaction acceptance while protecting against fraud. Worldpay can also leverage the data gained as a result of its core payment solutions to offer payment analytics and insights on peers and to provide industry benchmarking. This additional functionality allows its merchants to, for example, run loyalty schemes, guide their consumers to preferred payment types and improve their overall performance.

Worldpay serves a diverse set of merchants across a variety of end-markets, sizes and geographies. On a typical day, it processes approximately 31 million mobile, online and in-store transactions worldwide, offering access to 326 payment methods in 126 transaction currencies across 146 countries, while supporting approximately 400,000 merchants, including large enterprises and domestic corporates and approximately 377,000 small and medium sized businesses. The Company also partners with innovative and fast-growing eCommerce businesses, including many of the world's most renowned and dynamic online brands.

In 2014, the Group's net revenue[3] was £863.4 million and Underlying EBITDA[4] was £374.7 million. In the six

months ended 30 June 2015, the Group's net revenue was £465.7 million and Underlying EBITDA was £182.6 million, an increase of 13.4% and 13.1% respectively compared to the six months to 30 June 2014 (both on an unaudited basis). The Group has achieved significant growth, increasing net revenue and Underlying EBITDA at a CAGR of 9.7% and 10.9%, respectively, over the three years ended 31 December, 2014.

Worldpay serves its merchants through three operating divisions:

§ Global eCommerce ("Global eCom") - Global eCom provides a wide range of online and mobile multi-currency payment acceptance, validation and settlement services for its customer book of large and fast growing internet-led multinationals. The large majority of Global eCom's approximately 1,500 merchants sit within five priority industry verticals ("verticals"): Digital Content, Global Retail, Airlines, Regulated Gambling and Travel. Global eCom accounted for 41.1% of the Group's "business unit contribution"[5] in 2014, and its net revenue

      has grown at a CAGR of 16.8% over the three years ended 2014.

§ Worldpay UK ("WPUK") - WPUK is the market leader in the UK accounting for 42% of all transactions as measured by estimated volume of point-of-sale ("POS") transactions in 2014[6].  It provides a proposition of

 

     in-store, phone, online and mobile payment acceptance solutions that includes 326 local and alternative methods of payment for approximately 300,000 UK and Ireland-based merchants, from small and medium-sized enterprises ("SMEs") to large corporates (including Tesco, Asda and M&S). WPUK accounted for 39.7% of the Group's business unit contribution in 2014 and its net revenue has grown at a CAGR of 9.5% over the three years ended 2014.

§ Worldpay US ("WPUS") - WPUS provides in-store, online and mobile payment acceptance solutions for US-based merchants, with a focus on developing omni-channel and integrated payment solutions for its approximately 137,000 SME customers and vertical-specific solutions for its approximately 44,000 enterprise customers in the grocery, petroleum, restaurant and retail industries. WPUS accounted for 19.2% of the Group's business unit contribution in 2014 and its net revenue has grown at a CAGR of 2.9% (4.9% on a constant currency basis) over the three years ended 2014.

Worldpay has a 30 year history of working closely with merchants to help them prosper in the global payments industry. In 2010, the Company was carved out of The Royal Bank of Scotland Group plc ("RBS") and established as a standalone business by private equity firms Advent International and Bain Capital.  In recent years, Worldpay has focused on establishing a clear strategic direction as an innovative payments technology company and has invested for long-term growth, including investing over £1 billion - approximately £400 million on a new acquiring engine, over £300 million in strategic acquisitions and joint ventures, and the remainder in people and products. Since 2010, the Company has hired approximately 2,500 employees, including an increase in engineering headcount of approximately 400%.

The Company's solutions are delivered by approximately 4,500 employees located across 25 offices (including its corporate headquarters in London) in 11 countries around the world. 

Philip Jansen, Chief Executive Officer of Worldpay, said:

"Worldpay has been transformed into a global leader in payments since it became an independent company in 2010.  This required an enormous investment to ensure Worldpay is at the forefront of a fast changing payments landscape.  We have invested over £1bn in our technology, people and capabilities including over £400m in a state of the art global payments acquiring engine as well as in the recruitment of approximately 2,500 highly skilled colleagues. As a result, we have built a modern and sophisticated technology-led organisation with huge potential.

The IPO is an exciting and logical next step as we seek to continue this momentum.  It will enable us to access new capital for growth, augment our global proposition and further enhance our ability to serve customers across the world.

We are extremely proud of what has been achieved through the dedication and talent of Worldpay's approximately 4,500 colleagues and are optimistic for the future of the company. This future will be built on our long-held pledge to help our customers prosper and I would reiterate my thanks and ongoing commitment to all our customers during this next chapter for Worldpay."

Sir Michael Rake, Chairman of Worldpay, said:

"Worldpay is a leader in the extremely dynamic world of digital payments having been a pioneer in card payments, multi-currency processing, online payments and contactless technology. It is led by an experienced management team with a clear understanding of the market and its trajectory and has demonstrated an impressive track record of sustained growth. 

Worldpay aims to lead the way in expanding global reach, data analytics and optimisation, and the emerging field of integrated payments. I believe Worldpay is very well positioned to continue its leadership in the ever-evolving global payments landscape. I look forward to contributing to this next exciting stage and helping Worldpay to achieve its vision to be the world's most progressive and reliable payments partner, sharing insights and helping customers prosper."

KEY HIGHLIGHTS

Worldpay participates in a large, fast growing and dynamic market

·     The payments market is highly attractive - fueled by the underlying shift in consumer behaviour away from cash: non-cash payment methods are set to grow at 7.3% CAGR 2015- 2019 vs. cash payments at 2.6% (by transaction value)[7]

·     Market growth is underpinned by three core industry specific themes: fast growth of online and mobile payments, higher growth in emerging markets compared to developed markets and differentiation of growth and market size by type of merchant industry segment

·     Technology is driving global commerce - new form factors and device types, abundant connectivity, and new defences and threats to identity and security are contributing to the continual evolution of the payments landscape

·     Consumers are embracing the seamless experience of new payment options and accelerating the pace of change through their increased expectations of merchants

·     Macro trends are encouraging merchants, Worldpay's customers, to focus more on payments than ever before.  Increasingly payments are seen as a strategic enabler of business growth.  In large part this is due to the increased opportunity but also complexity of payments wrought by the proliferation of alternative payment methods, globally and locally, the global expansion of regional card schemes, the on-going innovation around global payment transfer solutions such as bank transfers and peer-to-peer payments, and the possibilities presented by payment data

Worldpay operates a global payment network across a complex ecosystem

·      Worldpay processes approximately 11.5 billion transactions annually, representing approximately £370 billion in payments value and supporting approximately 400,000 merchants globally (2014 figures)

·      Worldpay is one of the top five global merchant acquirers[8], is the world's number one international payments acquirer[9], and processes approximately 40% of web-based transactions in Europe[10] with a diverse book of

      merchants and a strong track record of market entry, both organically and via selective acquisitions

·     Worldpay enables its merchants to grow their sales through the provision of 326 local and alternative methods of payment, whether global, regional or local, in 126 transaction currencies across 146 countries, accepting payments from geographies covering more than 99% of global GDP

·      Worldpay is a direct member of the Visa and MasterCard schemes in Europe and has Visa and MasterCard licences in Japan and has received approval in principle from Visa and Mastercard to its applications for licenses in Australia, as well as indirect licences through bank partnerships in the United States, Canada, India, Singapore and Hong Kong. Worldpay has also built a network of agreements with other schemes and local and alternative payment methods around the world, for example China UnionPay

·      An increasing proportion of the Group's new business wins are coming from Asia Pacific and Latin America, offering an increasing exposure to the higher growth of these emerging market geographies

·      Worldpay is an established player with a strong core business and next generation business model in the United States, which is the largest card market in the world

Extensive payment capabilities solving key business outcomes

·      Worldpay partners with its merchants to provide global, end-to-end solutions across the entire payments value chain to support their local needs, with the aim of simplifying complexity across geographies, payment channels and customer segments and delivering more sales at lower cost and lower risk to the merchant

·      Worldpay seeks to optimise business outcomes for its merchants, including by:

Offering its merchants a wide range of options to capture digital payments (including traditional and contactless terminals, mobile and online payments);

Broadening the reach of its merchants with access to more payment methods (including card payments for major networks, local and alternative payment methods as well as bank-out / bank-in) and an enhanced customer payment experience across multiple channels;

Providing relevant additional services such as fraud and risk management, treasury management and foreign exchange services; and

Enhancing its merchants' performance through insights derived from Worldpay's customer analytics, optimisation advice and business management tools

·      Worldpay has a strong track record dealing with varied customer challenges to improve business outcomes.  This is predicated on an intimate understanding of both payments and customers' current and future needs

Worldpay has deep go-to-market expertise across its chosen market segments and verticals

·      Worldpay has a targeted go-to-market approach that is specific to the industry, product and merchant needs that it serves

·      Through a systematic focus on specific verticals, the Group has been able to build deep, industry specific expertise and become an expert in dealing with the needs and challenges of its merchants to offer highly relevant payment solutions

·      The Group has a dedicated global direct sales force of approximately 900 full-time equivalents to maintain control over the sales process, develop deep local relationships and provide differentiated customer support

·      In addition to its large direct sales force, Worldpay has several arrangements that complement and extend the Group's own capabilities to generate new sales leads with referral partners, VARs (value-added resellers) and technology platforms

·      Worldpay has cultivated strong relationships with large partners, including RBS branches in the UK and Citizens Bank in the United States, the Federation of Small Businesses, BT and a number of national-scale business-to-consumer enterprises

Advanced technology & security

·      Technology is at the heart of Worldpay's proposition and is a fundamental source of competitive differentiation, having invested over £400m (with c. £100m remaining) in a state of the art, end-to-end new acquiring engine

·      Worldpay operates a proprietary, scalable, global payments platform integrated across the entire transaction chain from the capture of a payment request, through routing and authorising the transaction, then clearing and settling the funds

·      The new Worldpay payments platform has been configured for the evolving and increasingly complex needs of 21st century payments.  It is configurable for almost any geography, currency, region or combination, is built to seamlessly accommodate alternative payments and supports a fully omni-channel transaction landscape.  Furthermore it enables Worldpay to leverage in real-time huge volumes of transaction data for enhanced merchant outcomes and business insights

·      Worldpay's technology base will provide opportunities for significant operating leverage, as the Group's new acquiring engine has been designed and created to provide capacity for five to ten times the transaction volume currently processed by the Group, and to enable the Group to quickly update its global proprietary payments platform at very low cost, preserving investment in innovation and new products

·      The Group has a proven track record of reliable performance, stability and security, and it has continued to improve since its separation from RBS, supporting strong historical growth while fixing inherited technology assets and building and integrating the new components

·      As of September 2015 the vast majority of Worldpay processing is entirely independent of RBS, including 100% of online gateway traffic, 99.9% of authorisations traffic and all third party settlement. The new clearing and settlement engine will be built by Q1 2016 with migration of customers from the existing RBS infrastructure to be completed within 12 months thereafter

Worldpay has a compelling and attractive financial profile

·      The Group has a strong, diverse and loyal customer base with high customer lifetime value and high recurring revenue, as evidenced by 93% net revenue retention[11] in 2014, and limited concentration. The Group's top

      10 merchants contributed approximately 11% of total net revenue in 2014

·      Financial trajectory driven by robust organic growth profile due to leading position in a large, growing market and global footprint (e.g. emerging markets focus)

·      Consistent margin profile despite significant internal investment and development of standalone operations with material room for upside

·      Potential for material operating leverage in light of significant capital expenditure in technology capability and business infrastructure

·      Capital efficient model drives high free cash flow conversion as modest capital expenditure requirements anticipated after completion of separate new processing platform

·      There are multiple options and vectors for future growth including in existing markets and customer segments, in new markets, customer verticals and products/services and through proven M&A capabilities

Experienced management team with a track record of innovation

·      Worldpay has an experienced management team with a proven ability to execute its business plans and achieve results through growth/transformation, innovation and efficiency

STRATEGY

Core strategy to continue to deliver strong growth

·      Continue to power SME and complex corporate commerce through delivering mission-critical services, equipping merchants with advanced performance and data insight solutions to drive better business performance and ensure a best-in-class experience for its merchants

·      Leverage Worldpay's unique and deep vertical focus across current and new markets, to provide its merchants with real-time, on-the-ground solutions

·      Drive innovation and product development, by leveraging the Group's culture of problem solving for merchants to develop advanced payments solutions for its chosen segments

·      Realise full potential of the Group's operating model given significant investment, including expanding margins, improving free cash flow generation, benefiting from diminishing incremental operating cost and improving efficiency and productivity

·      Realise additional value through strategic acquisitions, leveraging a demonstrable track record of successful acquisitions

HISTORY

Worldpay has a long history of working closely with merchants to help them prosper and of driving innovation in the global payments market over the last 30 years. As a division of RBS, Worldpay was at the forefront of developing "global" scheme programmes with Visa and Mastercard, was among the first to operate a global online gateway and was early to help merchants roll out contactless acceptance and modern security standards. In 2010, the Group was carved out of RBS and established as a standalone business by private equity firms Advent International and Bain Capital. In recent years, Worldpay has focused on establishing a clear strategic direction as an innovative payments technology company and has invested for long-term growth, including investing over £1 billion in technology and capabilities, and by acquiring companies such as Cardsave (2010), Envoy (2011), Yespay (2013), Century Payments (2013), Cobre Bem (2014) and SecureNet (2014). The Group continues to be a leader in introducing new payment methods for merchants, including enabling China Union Pay (2010), supporting the eWallets V.Me and MasterPass in Europe, and the Group has been among the first to enable ApplePay in the UK. 

DIVIDEND POLICY

The Group expects to declare dividends of 20-30% of profit after tax per annum, commencing with an interim dividend for the Financial Year ending 31 December 2016, expected to be paid at the earliest in late 2016, assuming that there are sufficient distributable reserves.

REASONS FOR AND OVERVIEW OF THE OFFER

·      Intention to list on the premium segment of the Official List and to trade on the main market for listed securities of the London Stock Exchange

·      The Directors believe that the Offer and Admission will:

Support the Group's growth plans

Give the Company access to a wider range of capital-raising options which may be of use in the future

Enable the Group to reduce its outstanding debt

Further improve the ability of Worldpay to recruit, retain and incentivise its key management and employees

Create a liquid market in the Shares for existing and future shareholders

·      The Offer will also provide existing indirect shareholders of the Company, including funds advised by Advent International (the "Advent Funds") and Bain Capital (the "Bain Capital Funds") (and who jointly hold their beneficial interest in the Company through, Ship Global 2 & Cy S.C.A., the "Institutional Selling Shareholder"), the Company's senior management, current and former employees and other investors with an opportunity for a partial realisation of their respective investment in the Company. The current shareholders may also realise a portion of their investment in the Company through the repayment of shareholder loans using additional Offer proceeds.

·      The Company intends to raise net proceeds from the Offer of approximately £890 million, in order to reduce leverage to 3.75x net debt / Underlying EBITDA (as of 30 June 2015)

·      The Company expects to have a free float following the IPO of at least 25%

·      Each of the Company, the Institutional Selling Shareholder, the directors and certain employees will agree to customary lock-up arrangements with respect to their shareholdings for specific periods of time following Admission. It is currently expected that the Company, Institutional Selling Shareholder and certain employees will enter into 180 day lock-up arrangements and the directors and certain employees will enter into 365 day lock-up arrangements, each subject to customary exceptions. In addition, certain directors and employees are expected to retain at least 75% of their investment in the Company immediately following the IPO, and will enter into lock-up arrangements for up to three years

·      It is intended that an over-allotment option of up to 15% of the total offer size will be made available

·      Shares in the Offer will be offered to certain institutional and professional investors in the UK and elsewhere outside the United States in reliance on Regulation S of the US Securities Act of 1933, as amended (the "US Securities Act") and in the United States to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A of the US Securities Act, or another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act

·      Full details of the Offer will be included in the Prospectus expected to be published in the coming weeks

·      It is expected that Admission will take place in October 2015 and that, following Admission, Worldpay will become eligible for inclusion in the FTSE UK Index Series

·      In relation to the Global Offer and Admission, Merrill Lynch International ("BofA Merrill Lynch"), Goldman Sachs International ("Goldman Sachs") and Morgan Stanley & Co. International plc ("Morgan Stanley") are acting as Joint Global Co-ordinators, Barclays Bank PLC ("Barclays"), Credit Suisse Securities (Europe) Limited ("Credit Suisse") and UBS Limited ("UBS Investment Bank") are acting as Joint Bookrunners. Jefferies International Limited ("Jefferies") and Mediobanca - Banca di Credito Finanziaro S.p.A. ("Mediobanca") are acting as Co-lead Managers, Canaccord Genuity Limited ("Canaccord Genuity") and Pacific Crest Securities, a division of KeyBanc Capital Markets Inc. ("Pacific Crest Securities") are acting as Co-managers. Lazard & Co., Limited ("Lazard") is acting as Financial Adviser to the Company

ENQUIRIES

Joint Global Coordinators:

 

BofA Merrill Lynch

Tel: +44 (0) 20 7628 1000

James Fleming

Saba Nazar

Tim Waddell

Goldman Sachs                                                       

Tel: +44 (0) 20 7774 1000

Richard Cormack
Anthony Gutman
Stephen Considine

Morgan Stanley

Tel: +44 (0) 20 7425 8000

Henrik Gobel Max Mesny Ben Grindley

Joint Bookrunners:

Barclays

Tel: +44 (0) 20 7623 2323

Christopher P.M. Dimsey

Tom Johnson

 

Credit Suisse

Tel: +44 (0) 20 7888 8000

Stuart Field

Philippe Cerf

 

UBS Investment Bank

Tel: +44 (0) 20 7567 8000

Jean-Baptiste Petard
Christopher Smith 

Financial Adviser to Worldpay:

 

Lazard

Tel: +44 (0) 20 7187 2000

Charlie Foreman

Fotis Hasiotis

Nick Fowler

 

Media enquiries:

 

Finsbury

Tel: +44 (0) 20 7251 3801

James Murgatroyd

James Fearnley

Andrew Hughes

 

FTI Consulting

Tel: +44 (0) 20 3727 1522

Fergus Wheeler

Louisa Feltes

 

Camarco

Tel: +44 (0) 20 3757 4989

Edward Gascoigne-Pees

Hazel Stevenson

FINANCIAL HIGHLIGHTS

Financial Years 2012 - 1H 2015 (£millions)

H1 2014

2014

2013

2012

Revenue

Net revenue
Gross profit
Underlying EBITDA[12]

 

(Unaudited)

1,940.3 465.7 406.4 182.6

(Unaudited)

1,717.4 410.6 365.0 161.4

 

3,626.6 863.4 765.3 374.7

3,378.5 800.1 702.8 345.6

 

3,076.6 717.4 634.2 304.5

No. of transactions (m)

6,277

5,323

11,476

9,905

9,020

Transaction value (£ m)

194,599

175,646

369,523

343,066

316,669

Avg. transaction value (£)

31

33

32

35

35

BOARD OF DIRECTORS






 

The existing Board, as set out below, will continue under the chairmanship of Sir Michael Rake, with further additions, in the form of non-executive directors, anticipated as soon as reasonably practicable. The Company is in advanced discussions with highly experienced candidates to fulfil those positions in the near term either before, or shortly after, Admission. 

 

The UK Corporate Governance Code recommends that at least half the board of directors, excluding the chairman, should comprise non-executive directors determined by the board to be independent in character and judgement and free from relationships or circumstances which may affect, or could appear to affect, the director's judgement. Following the Offer, the Advent Funds and the Bain Capital Funds, which indirectly control the Institutional Selling Shareholder, will continue to be significant indirect investors in the Company. The Advent Funds and the Bain Capital Funds are each able, through the Institutional Selling Shareholder, to appoint one non-executive director to the Board for so long as the Advent Funds or the Bain Capital Funds (together with their respective associates) (as applicable) are entitled to exercise or control, directly or indirectly, the exercise of 10% or more of the votes able to be cast on all or substantially all matters at general meetings of the Company. The first such appointees are Robin Marshall and James Brocklebank. The Board is mindful of the need to also consider the interest of the Company's new investors. The Directors believe the Board and Committees will provide the appropriate corporate governance balance in light of the interests of both the existing shareholders and new shareholders.

 

For the reasons above, at Admission, the Board will not comply with the full provisions of the UK Corporate Governance Code in that at least half the Board, excluding the Chairman, will not comprise independent non-executive directors. However, the Company intends to achieve full compliance with the Governance Code over time and will update the market on new appointments as appropriate.

 

The members of the Board of Worldpay Group Limited are:

Name                                      Position

Name

Position

Sir Michael Rake

Chairman

Philip Jansen

Chief Executive Officer

Ron Kalifa

Vice Chairman and Executive Director

Rick Medlock

Chief Financial Officer

John Allan

Independent Non-Executive Director

Martin Scicluna

Independent Non-Executive Director

Robin Marshall

Non-Executive Director

James Brocklebank

Non-Executive Director

DIRECTORS' BIOGRAPHIES

Sir Michael Rake (Chairman)

 

Sir Michael Rake was appointed as independent non-executive chairman in September 2015. He is currently chairman of BT Group PLC, deputy chairman of Barclays Bank PLC and a director of McGraw Hill Financial. Sir Michael had a long and extensive career with KPMG, culminating in his appointment as international chairman between 2002 and 2007. Between 2010 and 2013, he was chairman of easyJet PLC. He has also held a variety of advisory roles in both the public and private sectors. He was president of the Confederation of British Industry between 2013 and 2015, chairman of the private equity oversight group, the Guidelines Monitoring Committee, from 2008 to 2013; the first Chairman of the UK Commission for Employment and Skills from 2007 to 2010, director of the Financial Reporting Council from 2008 to 2011 and chairman of Business in the Community from 2004-2007. Sir Michael brings to the Board extensive financial and commercial expertise, as well as significant experience in capital markets, technology and digital products and is a qualified chartered accountant.

Philip Jansen (Chief Executive Officer)

Philip was appointed as chief executive officer in April 2013, having previously been chief executive officer of Brakes Group between 2011 and 2013. Prior to that he held a variety of senior roles in Sodexo Holdings Limited, latterly as group chief operating officer and chief executive officer, Europe, South Africa and India. Earlier in his career, Philip was chief operating officer of MyTravel plc and managing director of Telewest Communications PLC. He started his career with Procter & Gamble. While Philip has gained significant international and chief executive officer experience in the international business sector, he has also developed key strengths in business transformation, change management and strategy development.

Ron Kalifa (Vice Chairman and Executive Director)

Ron was appointed as vice chairman and executive director in 2013, having previously been chief executive officer of the organisation for over 10 years. Prior to this Ron held various executive roles within RBS and prior to that within NatWest. Ron is regarded as an expert in the card and payments industry and was recognised as "Industry Personality of the Year" at the 2011 Card & Payments Awards for his commitment and contribution to the field. While Ron has significant experience as a chief executive officer within the payments industry, he has also developed key strengths in mergers and acquisitions and strategy development. Ron is also a member of the Visa Europe board.

Rick Medlock (Chief Financial Officer)

Rick was appointed as chief financial officer in 2015, joining Worldpay from Misys, where he was chief financial officer. From 2004 to December 2013, Rick was chief financial officer of Inmarsat plc and between 1996 and 2004 he served as chief financial officer and company secretary of NDS Group plc. The early part of his career was spent in a variety of roles as chief financial officer of a number of private equity backed technology companies in the UK and the US. Rick is a qualified chartered accountant.

John Allan, CBE (Non-Executive Director)

John was appointed as independent non-executive chairman in 2011 and is chairman of the remuneration committee. He is currently Chairman of Tesco plc, Barratt Developments plc and London First plc. Previously, John was chairman of Samsonite Corporation and Care UK Limited, co-deputy chairman of Dixons Carphone plc and a non-executive director of the Royal Mail Group, the UK Home Office Supervisory Board, 3i Group plc, PHS Group plc, Wolseley plc, Hamleys plc and Connell plc. He was previously also a member of the supervisory boards of both Lufthansa AG and Deutsche Postbank and senior advisor to Deutsche Bank. John has served as an executive director at BET plc and was on the board of Deutsche Post following its acquisition of Exel plc in December 2005, where he had been chief executive since September 1994.

Martin Scicluna (Non-Executive Director)

Martin was appointed as non-executive director in 2013 and is chairman of the audit committee. He is currently chairman of the RSA Insurance Group plc and Great Portland Estates plc. He served as a non-executive director and chairman of the audit committee of Lloyds Banking Group from 2008 to 2013 and was a member of the Financial Services Trade and Investment Board from 2013 to 2015. Prior to this, he was chairman of Deloitte LLP in the UK for 12 years to May 2007, having been a member of the Deloitte board from 1990 to 2007. He also has international experience as a member of the board of directors of Deloitte Touche Tohmatsu for nine years. Additionally, he was audit partner at Deloitte for 26 years and has experience in serving boards and audit committees of FTSE 100 companies as lead partner.

Robin Marshall (Non-Executive Director)

Robin was appointed as non-executive director in 2010 on the divestment of the Group from RBS in 2010 and represented the Bain Capital Funds on the board of directors. Robin joined Bain Capital in 2009, where he co-leads the European Business and Financial Services Sector team. Prior to joining Bain Capital, he was a Partner with 3i, where he was managing director of 3i's UK business, before founding 3i's US Private Equity Business in New York. Robin has led a range of deals across a number of sectors in both Europe and the US. In addition to Worldpay, he currently sits on the board of directors of Securitas Direct, BPL and Nets. Prior to his career in private equity, he was with Procter & Gamble and McKinsey & Company.

James Brocklebank (Non-Executive Director)

James was appointed as non-executive director on the divestment of the Group by RBS in 2010 and represented the Advent Funds on the board of directors. He joined Advent International in 1997 and has 18 years of private equity experience. James co-heads Advent International in Europe and is responsible for the European business and financial services sector team. He is also a member of the European Investment Advisory Committee. James has led Advent's investments in Worldpay, Nets and Equiniti Group and participated in seven other investments. He also sits on the board of Nets and Equiniti Group. Prior to Advent, James worked on international mergers and acquisitions in the London office of investment bank Baring Brothers and its affiliate Dillon, Read & Co. in New York.

 

PRE-IPO REORGANISATION

 

Immediately prior to Admission, the Company's share capital will be reorganised. The reorganisation will result in the Company having two classes of shares - being one class of ordinary shares and one class of contingent value rights ("CVRs"). The CVRs are intended to reflect the Group's interest in the potential equity value of Visa Europe, which has no carrying value in in the Group's consolidated balance sheet as at 30 June 2015. It is currently estimated that the Group has an approximate 6% interest in Visa Europe, with the total value of Visa Europe likely to be in excess of US$15 billion. The CVRs are intended to entitle the Institutional Selling Shareholder and, indirectly, the Advent Funds, Bain Capital Funds and other current shareholders of the Group, including certain senior management, to 90% of the net proceeds of any sale by Worldpay of its interest in Visa Europe (if any), with the Group retaining 10% of any such proceeds. The Group's independent non-executive directors, including the chairman, will have no interest in the CVRs. The CVRs are intended to be non-voting and not convertible into ordinary shares. There is no current intention to apply for admission of the CVRs on any stock exchange, although they will be capable of being listed and publicly traded (however the eligibility of the CVRs for listing has not been agreed with any regulatory body). The terms of the CVRs are to be set out in more detail in the Prospectus.

 

In addition, as part of the re-organisation, Worldpay Group Limited will be re-registered as a public company under the name Worldpay Group plc prior to Admission and certain shareholders loans within the Group and above (including the payment in kind notes issued by the Institutional Selling Shareholder) will be repaid concurrently with Admission, as will be further detailed in the Prospectus.

 

FINANCIAL TERMS

 

Underlying EBITDA

 

Earnings before interest, tax, depreciation and amortization, presented on an underlying basis ("Underlying EBITDA"), represents the Group's profit for the period before tax charges (credits), share of results of joint ventures, finance costs, and depreciation and amortisation (which Worldpay refers to as "EBITDA"), and adjusted to exclude certain separately disclosed items to remove the effects of certain changes the Company believes are not indicative of its underlying operating performance.  These separately disclosed items relate primarily to separation from RBS, development of the Group's new acquiring engine, certain restructuring costs, and substantial impacts from business set ups, acquisitions and disposals, as well as the impact of foreign exchange fluctuations on the value of Worldpay's assets and liabilities at each balance sheet date, and a make-whole payment on subordinated debt, accelerated discount unwind on yield free preferred equity certificates, write-off of previously capitalised finance costs, and write-off of fair value adjustments.  Separately-disclosed items are largely non-recurring, but some items are attributable across multiple years.  These items are separately disclosed and used as the basis for adjustment to EBITDA, however, in order to provide a view of underlying financial performance that is comparable between periods.

 

Net Revenue

 

Net revenue is revenue less interchange and scheme fees.

 

Net Revenue Retention

 

The term "net revenue retention" refers to the proportion of net revenue in a given period remaining after subtracting income generated by customers lost during that period, expressed as a percentage.

 

DISCLAIMER / FORWARD-LOOKING STATEMENTS

 

Important notice

 

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by Goldman Sachs International, Morgan Stanley & Co. International plc and Merrill Lynch International for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000, as amended ("FSMA").

 

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

 

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, into the United States (including its territories and possessions), Australia, Canada, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The Offer and the distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Australia, Canada or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

 

The securities to which this announcement relates have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any regulating authority or under any applicable securities laws of any state or other jurisdiction of the United States, and may not be offered or sold within the United States unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state law. There will be no public offer of the securities in the United States. The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to any national, resident or citizen of Australia, Canada or Japan.

 

In any EEA Member State that has implemented Directive 2003/71/EC (together with any amendments thereto and applicable implementing measures in any Member State, the "Prospectus Directive") other than the United Kingdom, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive. In addition, in the United Kingdom, this announcement is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

 

This announcement contains statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. The forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth and strategies. The forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance.

 

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements, such as future market conditions, currency fluctuations, the behaviour of other market participants, the performance, security and reliability of the Company's information technology systems, the Company's ability to maintain credit card payment scheme membership relationships and financial institution sponsorship, increases in credit card network fees, political, economic and regulatory changes in the countries in which the Company operates or in economic or technological trends or conditions. As a result, investors are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements speak only as of their date and the Company's shareholders, the Banks (as defined below) and any of such person's respective directors, officers, employees, agents, affiliates or advisers expressly disclaim any obligation to supplement, amend, update or revise any of the forward-looking statements made herein, except where it would be required to do so under applicable law. It is up to the recipient of the Presentation to make its own assessment as to the validity of such forward-looking statements and assumptions. No statement in this Presentation is intended as a profit forecast or a profit estimate and no statement in this Presentation or any related materials should be interpreted to mean that earnings per share for the future or current financial periods would necessarily match or exceed historical published earning per share.

 

Each of the Company and Goldman Sachs International, Morgan Stanley & Co. International plc, Merrill Lynch International, Barclays Bank PLC, Credit Suisse Securities (Europe) Limited, UBS Limited, Jefferies International Limited, Canaccord Genuity Limited, Pacific Crest Securities, a division of KeyBanc Capital Markets Inc. and Mediobanca - Banca di Credito Finanziano S.p.A. (together, the "Underwriters") and Lazard & Co., Limited (the "Financial Adviser") (together with the Underwriters, the "Banks") and their respective affiliates expressly disclaim any obligation or undertaking to update, review or revise any of the forward-looking statements contained in this announcement whether as a result of new information, future developments or otherwise.

 

This announcement is an advertisement and not a prospectus for the purposes of the Prospectus Rules of the FCA. Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information in the Prospectus intended to be published by the Company in due course in connection with the proposed admission of its Shares to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market of the London Stock Exchange.. Copies of the Prospectus will, following publication, be available from the Company's website, subject to applicable securities laws, and at the Company's registered office. Any purchase of Ordinary Shares in the proposed Offer should be made solely on the basis of the information contained in the final Prospectus to be issued by the Company in connection with the Offer. Before subscribing for or purchasing any Ordinary Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Ordinary Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The information in this announcement is subject to change.

 

The Offer timetable, including the date of Admission, may be influenced by a range of circumstances such as market conditions. There is no guarantee that the Offer will proceed and that Admission will occur and you should not base your financial decisions on the Company's intentions in relation to the Offer and Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Offer. The value of Shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the IPO for the person concerned.        

 

Each of Goldman Sachs International, Morgan Stanley & Co. International plc, Merrill Lynch International, Barclays Bank PLC, Credit Suisse Securities (Europe) Limited and UBS Limited, authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, Jefferies International Limited, Canaccord Genuity Limited and Lazard & Co., Limited, authorised and regulated by the Financial Conduct Authority in the United Kingdom, Pacific Crest Securities, a division of KeyBanc Capital Markets Inc., regulated by the US Securities and Exchange Commission and the Financial Industry Regulatory Authority, and Mediobanca - Banca di Credito Finanziaro S.p.A., regulated by the European Central Bank and the Italian stock market regulator, Consob, is acting exclusively for the Company and no one else in connection with the Offer. None of the Banks will regard any other person (whether or not a recipient of this document) as a client in relation to the Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for giving advice in relation to the Offer, the contents of this announcement or any transaction or arrangement or other matter referred to herein.

 

In connection with the Offer, each of the Banks and any of their respective affiliates, acting as investors for their own accounts, may purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of the Company or related investments in connection with the Offer or otherwise. Accordingly, references in the final Prospectus, once published, to the Shares being offered, subscribed, issued, acquired, sold, placed or otherwise dealt in should be read as including any offer, subscription, issue, sale, acquisition, placing or dealing in the Shares by any of the Banks and any of their affiliates acting as investors for their own accounts. In addition, certain of the Banks or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of Shares. None of the Banks nor any of their respective affiliates intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

 

Apart from the responsibilities and liabilities, if any, which may be imposed on any of the Banks by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforcable, none of Banks or any of their respective affiliates, directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

 

In connection with the Offer, Merrill Lynch International, as stabilisation manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. Merrill Lynch International is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings in the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation Merrill Lynch International or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer price. Save as required by law or regulation, neither Merrill Lynch International nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.

 

In connection with the Offer, Merrill Lynch International, as stabilisation manager, may, for stabilisation purposes, over-allot Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Offer. For the purposes of allowing it to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilisation period, Merrill Lynch International will enter into over-allotment arrangements with certain existing shareholders pursuant to which Merrill Lynch International may purchase or procure purchasers for additional Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Offer (the "Over-allotment Shares") at the offer price. The over-allotment arrangements will be exercisable in whole or in part, upon notice by Merrill Lynch International, for 30 calendar days after the commencement of conditional dealings in the Shares on the London Stock Exchange. Any Over-allotment Shares sold by Merrill Lynch International will be sold on the same terms and conditions as the Shares being sold in the Offer and will form a single class for all purposes with the other Shares.Save as required by law or regulation, neither Merrill Lynch International nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.

 

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

 



[1] An alternative payment method is defined as a particular means of accepting payment in a given country / jurisdiction

[2] Worldpay supports geographies covering 99% of global GDP

[3] For basis of preparation, please see paragraph entitled "Financial Terms - Net Revenue" below

[4] For basis of preparation, please see paragraph entitled "Financial Terms - Underlying EBITDA" below

[5] Business unit underlying EBITDA after allocation of central costs

[6] Lafferty Global Research - Cards, Payments & Consumer Banking: United Kingdom Report - September 2014. As measured by estimated volume of transactions in 2014

[7] Euromonitor International PLC 2011 - data for UK, US, Canada, Japan, Brazil, France, Germany, Netherlands, Italy and Spain (~75% of global transactions reported)

[8] Nilson Report, September 2014. By transaction volume in 2014

[9] Based on local acquiring capabilities in the most national markets

[10] Nilson report, June 2010

[11] For basis of preparation, please see paragraph entitled "Financial Terms - Net Revenue Retention" below

[12] For basis of preparation, please see paragraph entitled "Financial Terms - Underlying EBITDA" below


This information is provided by RNS
The company news service from the London Stock Exchange
 
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