Just months after closing one of the biggest deals of her career, Stephanie Ferris, CEO of Fidelity National Information Serviceshas a message for everyone: FIS is not over. Ferris and the company she runs are looking to get back into buying.
In February, the FIS closed the sale from a majority stake in WorldPay to GTCR, a Chicago buyout firm. The transaction helped FIS reduce its total debt, which had reached approximately $19.1 billion at the end of 2023, to around $10 billion once the sale is finalized. As of March 31, FIS’s debt stood at $11.2 billion, while its leverage ratio was around 2.7 times, a spokesperson said.
Deleveraging means FIS is reestablishing its mergers and acquisitions program, Ferris said. The Jacksonville company provides fintech software to merchants, banks and financial markets companies. FIS allocates about $1 billion annually to deals and will target small, synergistic products that the company does not currently have or does not have sufficient time to develop organically, she said. Its purchase last year of Bond Financial Technologies, a banking-as-a-service startup, was an acquisition — something FIS isn’t looking to replicate this time around. “We’re really looking for products or companies that have revenue, EBITDA and a proven business model,” Ferris said.
All acquisitions will be in areas where FIS is looking to grow, such as digital and payments capabilities in the banking sector, and commercial lending technology in the capital markets sector, it said. FIS will not seek to complete one large transaction but several smaller transactions. For a company to attract the interest of the FIS, it must have a turnover of at least 150 to 200 million dollars, otherwise it is “really not a company but just a product and it does not have not enough customers for us,” Ferris said.
Ferris spoke to Fortune last week after capping a triumphant investor day. FIS March 6 reported first quarter results above expectations. These results mark the fifth quarter of Ferris’ tenure where FIS has met or exceeded earnings expectations. The FIS also announced the launch from Atelio, which allows financial institutions, businesses and software developers to integrate financial services into their offerings. Atelio already has three clients: KeyBank, College Ave and RoyalPay. (Atelio includes Bond executives, including Bond co-founder and CEO Roy Ng, who is executive vice president and chief commercial officer of FIS Platform and Enterprise Solutions.)
“The first 18 months have been very busy, both internally and externally at FIS. I’m really happy with where we are,” Ferris said.
Ferris’s start as CEO of FIS was not easy. He was given the reins of a large publicly traded fintech that was in trouble. FIS’s heavy debt load meant the company could only make one acquisition, worth around $800 million. purchase of Payrix in 2021, from 2019 to 2022.
In February 2023, just months after Ferris became CEO, FIS announced plans to spin-off WorldPay. It began a sales process in April and signed a buyer for WorldPay in July, she said. The WorldPay process has generated a lot of interest, particularly among private equity firms, with Advent International rumored to be in the running. Ferris declined to comment. “We acted quickly. Deals die if they take time,” she said.
The decision to sell the majority of WorldPay meant Ferris was canceling one of the biggest payments deals of 2019. There were several that year. Fiserv acquired First Data for $22 billion, while Global Payments picked up TSYS for $21.5 billion and Worldline bought Ingenico for 7.8 billion euros.
FIS’ purchase of WorldPay “was a bad decision,” said Dan Dolev, senior fintech equity research analyst at Mizuho Securities USA. FIS purchased WorldPay at a crucial time of consolidation for processors. WorldPay didn’t have a branded point-of-sale terminal for small businesses, like Fiserv with Clover or Square with Square POS, Dolev said. All of WorldPay’s competitors had a branded outlet, making it difficult to compete, Dolev said.
“(Ferris) was very courageous to cancel the merger,” Dolev said. FIS shares also rebounded after falling to a 52-week low of $47.16 in October. The stock ended Tuesday at $76.39, up about 62%.
What is FIS?
FIS is one of the world’s largest financial services companies. Its software powers many of the largest private equity firms and 95% of Forbes 2024 Best Bank in the World list, Ferris said. FIS technology “underpins the entire financial services industry,” she said.
The FIS is so important that in March 2023, when several regional banks, including Silicon Valley Bank And Bank of signaturescollapsed, many CEOs of large and small banks contacted Ferris to make sure their systems were running smoothly, she said. Such responsibility is an honor and privilege that Ferris says she takes seriously: “I am a FIS delegate…I make sure we are there every day for our clients. »
Ferris, who has spent her entire career in finance, including as CFO of WorldPay, doesn’t think there will be a banking crisis in 2023. The financial system is very strong, according to Ferris.
“In fact, we’ve seen more account openings across the banking system. There have been more deposit accounts opened, contrary to the idea that people were withdrawing their money, running away and putting it out of their banks,” she said.
Ferris has spent his entire career in finance and has worn many hats. She has been the CFO, COO, President and now CEO of one of the largest fintechs. That makes her the most powerful woman in fintech, an honor Ferris said she wasn’t thinking about. “There was always a group of guys in a room. Because I grew up that way, it doesn’t really bother me,” she said.
When it comes to his peers, Ferris cites Jane Fraser, CEO of Citi Groupwho, according to her, is “a badass”. As the only woman running one of the largest banks, Fraser has a tough job, Ferris said. “I think she’s amazing,” she said.