FIS has agreed to sell a majority stake in its merchant payments arm Worldpay to private equity firm GTCR for up to $18.5 billion – one of the largest corporate carve-outs in history.

FIS to sell Worldpay for $18.5 billion

The deal will effectively unwind FIS’s $30 billion-plus acquisition of Worldpay in 2019 and marks a shift in strategy after it told investors in February it planned to spin off the unit to stockholders.

FIS will receive $11.7 billion in cash and a 45% ownership in Worldpay and plans to use the cash to pay down debt and fund share buybacks.

“This transaction allows FIS to partially monetise our merchant solutions business at an attractive valuation and provides certainty for all stakeholders,” chief executive Stephanie Ferris said in a statement.

GTCR is valuing Worldpay at 9.8 times its expected fiscal 2023 adjusted earnings before interest, taxation, depreciation and amortisation for an upfront valuation of $17.5 billion.

The purchase price could reach $18.5 billion based on the returns the firm earns from the deal. FIS will also benefit as a large minority shareholder from any future increase in Worldpay’s value.

Collin Roche, co-chief executive of GTCR, said in a statement that the firm had “tremendous confidence in the opportunity for sustained, long-term growth at Worldpay”.

The deal marks a return to private equity ownership for Worldpay, which was acquired by Advent and Bain Capital in 2010 from the Royal Bank of Scotland for $3 billion as part of the lender’s financial crisis bailout.