Worldpay readies for £6bn London float

The owners of Worldpay have hired a roster of banks to float the payment-processing company on the London Stock Exchange, seeking a roughly £6bn valuation that could make it one of the biggest UK initial public offerings this year.

Worldpay provides secure payment services for small and large businesses, including payments online, card machines and telephone payments. It was carved out of Royal Bank of Scotland in 2010 and sold to US private equity firms Advent International and Bain Capital.

Advent and Bain have appointed Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley as global co-ordinators for the IPO, said people familiar with the situation. Lazard is advising on the flotation. Worldpay declined to comment.

The owners are seeking to raise between £1bn and £1.5bn, selling equity at a price that would value the business at about £6bn, a person familiar with the situation said.

They are likely to market the company as a financial technology or “fintech” provider to take advantage of investor hunger for the sector.

Payment-processing providers are hoping to take advantage of the consumer shift to online payments that has accompanied the growth of broadband and mobile phone use. European regulators have been trying to increase pan-European competition in the sector and encourage participation in the payments industry from non-banks. The flotation plans were first reported by Sky News.

Banks have been the traditional providers of payment processing, a backbone of financial services. But many of them, particularly in Europe, have started selling them off to free up capital and improve their return on equity, as they focus on their core businesses to adapt to new regulations.

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In March last year a consortium led by Advent and Bain agreed to buy Worldpay’s payments services rival Nets Holdings from a group of Nordic banks for about $3.1bn. That business remains separate from Worldpay.

Italian banks services provider Istituto Centrale Banche Popolari (ICBPI), which is owned by 11 Italian co-operative banks, is being sold because of regulatory pressure to beef up their capital bases. Private equity firms are considered the likely buyer.

Worldpay’s IPO could herald a series of flotations of payment-processing companies, as private equity firms and other owners seek to profit from their investments. Last year French computer-services provider Atos spun off its Worldline online payments company in an IPO.