A group of banks led by JPMorgan Chase and Goldman Sachs are lining up around $9.4 billion of debt to back GTCR's purchase of a majority stake in Worldpay in what would be the largest buyout financing in over a year.
The financing will include $8.4 billion of leveraged loans and high yield bonds, denominated primarily in dollars but also in euros, according to people with knowledge of the matter who asked not to be identified because the details are private. The funding package will also include a roughly $1 billion revolving credit facility, one of the people said.
Private equity firm GTCR on Thursday agreed to purchase a 55% stake in payment processor Worldpay, the Fidelity National Information Services unit that handles card payments for global businesses, valuing the company at $18.5 billion. FIS will retain a 45% stake.
The financing is expected to be sold to institutional investors via a syndication process as soon as September, the people said. Discussions are in the early stages and the timing may change. Given the size, it'll be a big test of market capacity for buyout funding. Banks will aim to tap into as much liquidity as possible, accessing different pools of capital across the loan and bond markets on both sides of the Atlantic.
JPMorgan will lead the dollar portion of the financing, while Goldman Sachs will lead the euro portion, the person said. Citigroup, Wells Fargo, Deutsche Bank and UBS are also providing debt financing to support the transaction.
GTCR, JPMorgan, Citigroup, Wells Fargo, Deutsche Bank and UBS declined to comment, while Goldman Sachs and Worldpay didn't respond to requests seeking comment.
It's the largest buyout financing since Wall Street agreed to lend $13 billion to help fund Elon Musk's takeover of Twitter last year. It's also the clearest sign yet of a nascent return to risk taking by banks which have cleared, albeit at huge losses, much of the underwriting commitments stuck on their balance sheets since last year.
The deal is expected to be well received by the market, after a dearth of mergers and acquisitions since global central banks began aggressively raising interest rates to quell inflation. Worldpay is largely perceived as a well-known, high quality name being backed by a financial and corporate sponsor.
Its debt relative to earnings is expected to be just above 4 times following the transaction, according to the person familiar, continuing a recent trend of banks financing deals with more conservative leverage ratios.
—With assistance from Michael Gambale.
