8-KMaterial AgreementsOther EventsExhibits & Filings

Fidelity National Information Services, Inc. 8-K Report, Material Agreement (Apr 11, 2019)

Filed April 11, 2019For Securities:FIS

Summary

This 8-K filing by Fidelity National Information Services, Inc. (FIS) primarily details amendments to its existing credit agreement in preparation for its previously announced acquisition of Worldpay, Inc. The amendments are designed to facilitate the financing of this significant transaction, which is expected to be a material event for FIS. Specifically, the company has amended its credit agreement to allow for increased debt capacity related to the acquisition, ensuring sufficient liquidity for the cash portion of the purchase price, Worldpay's debt repayment, and related transaction costs. Key changes include adjustments to leverage ratio calculations to accommodate acquisition financing and the ability to draw up to $2.0 billion on a limited conditionality basis for acquisition-related purposes. FIS also outlines its strategy for permanent financing, which is anticipated to involve debt securities, commercial paper, and revolving credit borrowings, aiming to replace the existing bridge facility. Investors should note the company's proactive approach to securing and structuring its financing for this transformative acquisition, while also acknowledging the inherent risks and uncertainties associated with such a large-scale transaction, as detailed in the forward-looking statements.

Key Highlights

  • 1FIS entered into a Second Amendment to its credit agreement on April 5, 2019, to facilitate the acquisition of Worldpay, Inc.
  • 2The Second Amendment allows for exclusion of acquisition-related debt from leverage ratio calculations prior to closing, provided it's repayable if the acquisition fails.
  • 3A prior First Amendment on March 29, 2019, permitted up to $2.0 billion in revolving loans on a limited conditionality basis for acquisition financing.
  • 4The Bridge Facility commitment was reduced from $9.5 billion to $7.5 billion following the First Amendment.
  • 5FIS plans to replace the Bridge Facility with permanent financing estimated at approximately $11.1 billion, potentially including debt securities, commercial paper, and revolving credit.
  • 6The permanent financing aims to fund the cash portion of the Worldpay acquisition, repay Worldpay's indebtedness, and cover transaction expenses.
  • 7The company may choose to leave some of Worldpay's existing notes outstanding (up to $1.7 billion), which could reduce the permanent financing amount.

Frequently Asked Questions

The main purpose of the amendments is to facilitate the financing for FIS's acquisition of Worldpay, Inc. The changes allow FIS to secure the necessary funds for the cash portion of the acquisition, repay Worldpay's existing debt, and cover associated transaction costs, while also adjusting debt covenants to accommodate this large transaction.

The Second Amendment allows FIS to exclude certain debt issued to finance the Worldpay acquisition from the calculation of its maximum leverage ratio prior to the acquisition's closing. This provides flexibility in managing its leverage during the acquisition period.

FIS intends to replace the existing bridge financing with permanent financing before the acquisition closes. This permanent financing is expected to be around $11.1 billion and will likely include debt securities, commercial paper, and revolving credit borrowings. The exact amount and structure may vary based on market conditions and decisions regarding Worldpay's existing notes.

FIS outlines several risks, including the possibility that the transaction may not be completed, that expected benefits (like cost/revenue synergies) may not be realized, difficulties in integrating FIS and Worldpay, customer or employee loss, unforeseen liabilities, and broader economic or regulatory uncertainties. They also mention risks related to technology, competition, and international operations.