FIS agrees to pay $210M settlement

Dive Brief:

• Fidelity National Information Services agreed last week to pay $210 million to settle a lawsuit brought against it by investors over its $35 billion-dollar purchase of the merchant services firm Worldpay, according to a spokesperson for plaintiffs’ lawyers at the firm Labaton Keller Sucharow.
• Under terms of the Dec. 17 legal agreement, the recovery is expected to be about 42 cents per “damaged share,” but that amount will be shaved to 32 cents on average, after taking into consideration up to $47.5 million in fees and expenses, plus interest, for the plaintiffs’ lawyers, according to a legal document provided by the spokesperson. The agreement is contingent on court approval.
• The defendants in the case, including FIS CEO Stephanie Ferris and her predecessor Gary Norcross, “have denied and continue to deny any and all allegations of wrongdoing or fault” asserted in the lawsuit, the settlement document said. They also deny having “committed any act or omission giving rise to any liability or violation of law” and that investors have “suffered any loss attributable” to their actions, it said.

Dive Insight:

FIS stockholders alleged that the Jacksonville, Florida-based company and its executives made “materially false or misleading statements or omissions” about the 2019 purchase of Worldpay, artificially inflating FIS shares, according to the settlement. When those alleged misstatements were revealed, through a “series of partial corrective disclosures,” the stock price suffered, the document said.

The initial complaint, filed with the court on Oct. 22, 2024, characterized investor losses by saying the shares “declined dramatically,” closing at $66 per share on Feb. 13, 2023, dropping about 36% from a closing price of $104.13 on August 3, 2022.

In 2019, FIS had agreed to acquire Worldpay for $35 billion, or about $43 billion including the debt, according to a Reuters news report at the time.

FIS acquired the payments processing business from Vantiv, which owned Worldpay for about a year, after closing on the purchase in 2018. It had agreed to pay about $10 billion for the business the prior year.

The FIS-Worldpay transaction occurred under the leadership of Norcross. “Scale matters in our rapidly changing industry," he said at the time regarding the newly combined banking and payments powerhouse, according to Reuters.

In 2022, Norcross exited as the company’s CEO earlier than expected, and didn’t take on the board’s executive chairman position, as had been planned. The CEO job was then handed to Ferris. 

Under Ferris, FIS determined that Worldpay wasn’t a good strategic fit, and it crafted a deal in 2023 to sell a majority stake in the Worldpay business to Chicago private equity firm GTCR for $11.7 billion, valuing the company at $17.5 billion. 

That sale to GTCR was completed last year, and then in the ongoing saga of Worldpay changing hands, the business was sold by FIS and GTCR to Global Payments this year for $24.25 billion.

Investors who sued FIS and the executives in U.S. District Court for the middle district of Florida included the Nebraska Investment Council, North Carolina Retirement Systems, and North Carolina Supplemental Retirement Plans.

The settlement class includes investors who held FIS shares between May 7, 2020 and Feb. 10, 2023.

Spokespeople for FIS didn’t respond to a request for comment.