Payments processor Worldpay looks set to become a new FTSE 100 candidate as its private equity owners announce their intention to float the business.
Advent and Bain Capital bought 80% of Worldpay from RBS (RBS) in 2010 for £1.7 billion and acquired the remainder in 2013. Now it could attract a market value of up to £6 billion, according to some press reports.
New York-listed peer Global Payments (GPN:NYSE) trades on a trailing enterprise value to earnings before interest, tax, depreciation and amortisation multiple of 14.3.
A similar valuation would imply Worldpay would be worth about £5.4 billion on an enterprise value basis, with roughly a £4 billion market capitalisation. This makes it easily large enough for FTSE 100 inclusion, if other stock exchange conditions are met.The listing is likely to be hotly anticipated because of a dearth of large, high quality payments companies in the UK. US investors are spoiled for choice, with the likes of Visa (V.:NYSE), MasterCard (MA.:NYSE) and American Express (AXP:NYSE).
Worldpay also owns a 6% stake in unlisted Visa Europe worth roughly £580 million, though 90% of the value of any sale of the stake would go to Advent and Bain under the current terms of the initial public offering (IPO).