Just months after completing one of the biggest deals of her career, Stephanie Ferris, the CEO of Fidelity National Information Services, has a message for everyone: FIS isn’t done. Ferris and the company she leads is looking to get to back to buying.
In February, FIS closed the sale of a majority stake in WorldPay to GTCR, a Chicago buyout shop. The transaction helped FIS cut its total debt, which had ballooned to about $19.1 billion at the end of 2023, to about $10 billion once the sale was completed. As of March 31, FIS debt stood at $11.2 billion while its leverage ratio was about 2.7 times, a spokesman said.
The deleveraging means FIS is reinstating its M&A agenda, Ferris said. The Jacksonville company provides fintech software to merchants, banks, and capital markets firms. FIS is allocating about $1 billion a year to deals and will be targeting small, synergistic products that the company currently doesn’t have or doesn’t have enough time to build organically, she said. Its purchase last year of Bond Financial Technologies, a banking-as-a-service startup, was an acquihire—something FIS is not seeking to replicate this time around. “We’re really looking for products or businesses that have revenues and EBITDA and a proven business model,” Ferris said.
Any acquisitions will come in areas that FIS is looking to grow, like digital and payments capabilities in the banking space, and commercial lending technology in the capital markets sector, she said. FIS won’t be looking to do one big transaction but multiple, smaller deals. For a company to attract FIS’s interest, they should be at least $150 million to $200 million in revenue or it’s “really not a business but just a product and it doesn’t have enough customers for us,” Ferris said.
Ferris spoke to Fortune last week after capping a triumphant investor day. FIS on March 6 reported first quarter earnings that surpassed expectations. The results marked the fifth quarter during Ferris’s tenure that FIS has met or beat earnings expectations. FIS also announced the launch of Atelio, which lets financial institutions, businesses and software developers embed financial services into their offerings. Atelio already has three customers: KeyBank, College Ave and RoyalPay. (Atelio includes execs from Bond including Roy Ng, co-founder and CEO of Bond, who is EVP, chief business officer of FIS Platform and Enterprise Solutions.)
“It’s been a very busy first 18 months, both internal to FIS and external. I’m really pleased with where we are,” Ferris said.
Ferris’ start as FIS’s CEO wasn’t an easy one. She was handed the reins of a large, publicly traded fintech that was struggling. FIS’s heavy debt load meant the company could complete only one acquisition, its roughly $800 million buy 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 launched a sales process that April and had a buyer for WorldPay signed by July, she said. The WorldPay process generated lots of interest, especially among private equity firms, with Advent International rumored to be in the running. Ferris wouldn’t comment. “We moved fast. Deals die if they take a long time,” she said.
The decision to sell a majority of WorldPay meant Ferris was undoing one of the biggest payments deals of 2019. There were several that year. Fiserv acquired First Data for $22 billion, while Global Payments scooped up TSYS for $21.5 billion and Worldline bought Ingenico for 7.8 billion euros.
FIS buying WorldPay “was a poor decision,” said Dan Dolev, a senior analyst in fintech equity research at Mizuho Securities USA. FIS bought WorldPay at a peak moment of consolidation for processors. WorldPay didn’t have a branded point of sale terminal for small business, like Fiserv has with Clover or Square has with Square POS, Dolev said. All of WorldPay’s competitors had a branded POS, making it tough for it to compete, Dolev said.
“[Ferris] was very courageous to unwind the merger,” Dolev said. Shares of FIS have also rebounded after dropping to a 52-week low of $47.16 in October. The stock on Tuesday ended at $76.39, up about 62%.
What is FIS?
FIS is one of the world’s biggest financial services companies. Its software powers many of the biggest private equity firms and 95% of the Forbes 2024 World’s Best Bank list, Ferris said. FIS technology “underpins the entire financial services industry,” she said.
FIS is so important that in March 2023, when several regional banks, including Silicon Valley Bank and Signature Bank, collapsed, many large and small banks CEOs reached out to Ferris to make sure their systems were kept running smoothly, she said. Such responsibility is an honor and privilege that Ferris says she takes seriously: “I’m a steward of FIS… I’m making sure that we’re here every day for our clients.”
Ferris, who has spent her whole career in finance, including as the CFO of WorldPay, doesn’t think there was a banking crisis in 2023. The financial system is very strong, according to Ferris.
“In fact, what we saw were more accounts opened across the entire banking system. There were more deposit accounts opened versus this notion that people were drawing their money down and fleeing and putting it outside their banks,” she said.
Ferris has spent her whole career in finance and has worn many hats. She’s been a CFO, a chief operating officer, a president and now CEO of one of the biggest fintechs. This makes her the most powerful woman in fintech, an honor that Ferris said she doesn’t think about. “It’s always been a bunch of guys in a room. Because I grew up that way, it doesn’t really bother me,” she said.
When it comes to peers, Ferris points to Jane Fraser, the CEO of Citigroup, who she said 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.
