Merger completes; synergies to drive acceleration
Combining the strengths of Vantiv's US point-of-sale and Worldpay's global online payments businesses, the new Worldpay, Inc. should continue taking share within a secular growth market for several years. As synergies are realised, we model adjusted EPS growth accelerating to ~20% YoY in CY19, and mid-teens thereafter. We reiterate our Overweight recommendation and raise our 12-month price target to $96, requiring the stock to maintain its 22x pro forma PE multiple in a year.Worldpay is a holding company. Through its subsidiaries, the company provides electronic payment processing services to merchants and financial institutions. The company operates two segments: Merchant Services, which provides merchant acquiring and payment processing services to national merchants, regional and small-to-mid sized businesses; and Financial Institution Services, which provides card issuer processing, payment network processing, fraud protection, card production, prepaid program management, automated teller machine driving and network gateway and switching services that utilize the company's proprietary Jeanie debit payment network to a set of financial institutions.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
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