Ladies and gentlemen, thank you for standing by, and welcome to the Global Payments Investor and Analyst Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, today's conference will be recorded. At this time, I'd like to turn the conference over to your host, Senior Vice President, Investor Relations, Winnie Smith. Please go ahead.
Good morning. The press release and investor presentation regarding today's news are available on the investor relations section of our website at www.globalpayments.com. During this presentation, we will make forward-looking statements which include, but are not limited to, the strategic rationale and financial benefits of the transactions, including expected future financial and operating results, and the pro forma company's plans, objectives, expectations, and intentions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements or historical performance. We encourage you to review the information in the reports Global Payments has filed with the SEC regarding these specific risks and uncertainties in the most recent annual report on Form 10-K and quarterly report on Form 10-Q, and any material updates to these factors contained in any future filings.
Joining me on the call is our CEO, Cameron Bready, our President and COO, Bob Cortopassi, and our CFO, Josh Whipple. Now, I'll turn the call over to Cameron.
Thank you, Winnie, and good morning, everyone. We appreciate you joining us early this morning for such an exciting announcement. Today marks a pivotal milestone in our journey to become the worldwide partner of choice for commerce solutions with our announcement that we have reached definitive agreements to divest our issuer solutions business to FIS for $13.5 billion and acquire Worldpay from GTCR and FIS for a net purchase price of $22.7 billion, or a total value of $24.25 billion, including a $1.55 billion anticipated tax benefit. These transactions allow us to simplify our business and position Global Payments as a leading pure-play commerce solutions provider for merchants of all sizes with extensive global scale.
With Worldpay, we bring together highly complementary capabilities and distribution networks, creating significant opportunities for the combined business to accelerate growth, amplify investment and innovation, and elevate client experiences with leading solutions across the full merchant spectrum. Together, we significantly increase our exposure to the fastest-growing digital trends, geographies, and vertical markets in payments. Additionally, the concurrent divestiture of issuer solutions allows us to further sharpen our focus while still achieving our strategic objectives to extend our capabilities across the payments value chain through a commercial partnership with FIS. These transactions will meaningfully enhance our scale and financial profile with expected pro forma adjusted net revenues of approximately $12.5 billion and adjusted EBITDA of approximately $6.5 billion, inclusive of run rate synergies.
On a combined basis, the company will have impressive global reach, serving more than 6 million merchants and enabling approximately 94 billion transactions and $3.7 trillion in volume across more than 175 countries. The new Global Payments will be positioned as one of the world's largest merchant solutions providers with the most comprehensive suite of products and capabilities, a diversified global presence, and enhanced distribution. The company will have opportunities more than ever to expand with existing customers and will offer a compelling value proposition to attract and delight new merchants and software and platform partners. Josh will cover the structure and financial benefits in more detail in a moment, but let me quickly provide a high-level overview of these milestone transactions that will accelerate our strategy. The divestiture of issuer solutions to FIS will be executed for a combination of cash and FIS's stake in Worldpay.
Concurrently, we will acquire the remaining stake in Worldpay from GTCR for a combination of cash and Global Payments stock. We have identified compelling synergies enabled by substantial revenue enhancement and expense reduction opportunities as we benefit from our expanded suite of capabilities and solutions in greater economies of scale. Importantly, given the strong financial profile of the pro forma company and the strong free cash flow that we will generate, we will delever quickly and be positioned to return significant capital to shareholders, largely consistent with our capital allocation strategy that we detailed on our investor conference in September. Bringing together Global Payments' differentiated merchant solutions focused on SMB customers with Worldpay's world-class capabilities for e-commerce and enterprise clients positions the combined business to deliver end-to-end payment solutions for leading customer experiences for merchants of all types and sizes globally.
The combination also meaningfully enhances integrated and embedded capabilities for partners, adding Worldpay's PayRex solution to complement our existing offerings. Combined, we'll have leading integrated offerings across an array of operating models supporting software, marketplace, and platform partners worldwide. Worldpay also serves to enhance and diversify our distribution globally, as well as providing a large and attractive installed base of customers. To that end, Global Payments will bring an expanded portfolio of leading capabilities, including our Genius point-of-sale offering and extensive suite of commerce enablement solutions to Worldpay's customers. Lastly, as one company, we will be able to amplify and accelerate the delivery of innovative technology and best-in-class solutions while also continuing to provide a differentiated service experience to the full spectrum of merchants globally.
For those of you that are new to the Worldpay story, the company is a leading merchant acquirer with a best-in-class digital platform powering global e-commerce solutions for some of the most sophisticated enterprise companies with complex multinational needs. Worldpay also offers modern managed Payfac and payback as a service capabilities to software, platform, and marketplace partners that complement Global Payments' existing portfolio of integrated and embedded payment solutions. Finally, core SMB accounts for approximately a quarter of Worldpay's business, which, as I mentioned, provides incremental opportunities for Global Payments' leading suite of software, point of sale, commerce enablement, and other core payment solutions. Today, Worldpay processes over 55 billion transactions annually and serves 1.4 million merchant customers, including more than 500,000 enterprise clients, with an extensive network of financial institutions and other partners on a global basis.
Focusing in on Worldpay's e-commerce platform, the company is a leader in digital solutions with extensive international reach, which it complements with a comprehensive local processing presence and know-how. Worldpay has significant technology and product depth across alternative payment mechanisms, FX solutions, payouts, marketplaces, authorization optimization, analytics, fraud and risk management, and provides a highly configurable solution to all delivered by a flexible, modern, and modular architecture. Its leading portfolio of digital native relationships includes many of the largest and most sophisticated global companies across a diverse and attractive set of end markets, where Worldpay is uniquely positioned to solve for complexity with deep vertical expertise. Marquee customers include digital media giants, multinational retail marketplaces, and fintech leaders, among others.
It is worth noting that Worldpay also has a fast-growing emerging markets presence and a global network of financial institutions and other partners supporting the digital ambitions of its enterprise clients, which is contributing to its growth. Now, let me provide more detail on Global Payments and Worldpay's highly complementary payment, software, and commerce enablement solutions. We're bringing together Worldpay's leading capabilities across e-commerce and enterprise, marrying it with Global Payments' differentiated vertical market software and commerce enablement solutions focused on SMBs. This will pave the way for significant revenue enhancement opportunities and will catalyze growth as the demand for software and digital solutions accelerates around the world. We will extend Worldpay's digital native capabilities down market to the more than 6 million SMB merchants we serve today on a combined basis.
At the same time, we will bring an expanded portfolio of capabilities, including our Genius point-of-sale and other owned software offerings, as well as our other extensive commerce enablement solutions to delight Worldpay's large installed base of SMB customers. Additionally, Worldpay's registered payments facilitation capabilities and innovative managed payback solution, PayRex, enhance our integrated and embedded solutions and ability to meet software and platform partners how and where they want to be met with tailored offerings across an expanded continuum of operating models and commercial structures. On a combined basis, we serve thousands of platform and software partners across over 100 vertical markets and will be positioned to provide a wider suite of products and services that align with their unique targeted outcomes.
Our ability to deliver an even fuller value stack in key vertical markets will produce deeper, richer, and more value-added relationships with partners, further differentiating Global Payments from our peers. Further, as one company, we will amplify our global distribution channels and go to market with a sales force of more than 4,000 professionals across 40-plus countries physically with local market expertise. We will also bring together direct-to-enterprise, specialized software sales, thousands of financial institution partnerships, and a leading indirect and channel based on footprint, in addition to providing fully digital self-service onboarding and services. Notably, in connection with the transaction, we will establish a strategic commercial partnership with FIS that will enable our companies to jointly bring a holistic suite of capabilities to financial institutions globally, including core banking, treasury management, embedded commerce, issuer processing, risk and fraud, merchant solutions, and more.
Importantly, this relationship will allow us to continue to advance our strategic objectives with issuer solutions, extending our capabilities across the payment value chain through a commercial partnership model. In sum, our extensive and differentiated distribution network will serve as a backbone for our revenue enhancement opportunities, allowing us to bring our broad portfolio of digital assets, physical solutions, software, and commerce enablement to our collective merchant customers and partners around the globe. Together, Global Payments and Worldpay's significant scale will enable us to accelerate innovation, which will deliver to merchants seamlessly with vertical market fluency regardless of customer size or location. Our global capabilities will span more than 175 countries and include some of the most attractive and fastest-growing markets across EMEA, Asia-Pacific, and Latin America.
In geographies where both businesses operate today, we will combine Global Payments' physical footprint and local product sales and service expertise with Worldpay's extensive and leading card-not-present capabilities to enable differentiated omnichannel solutions on a worldwide basis. Additionally, Worldpay has a presence in a number of attractive markets that Global Payments does not serve today, including France and the Nordics and Europe, the Middle East and Africa, as well as Japan, one of the largest economies and payment markets in Asia-Pacific. Combined, we could not be better positioned to deliver the very best experiences for our customers with the very best technologies in the very best markets. Now, let me turn it over to Josh to provide more specifics on the transactions.
Thanks, Cameron, and good morning, everyone. We appreciate you joining us today to discuss these transformative transactions.
As Cameron noted, we have entered into definitive agreements to sell our issuer solutions business to FIS for cash and FIS's stake in Worldpay. Concurrently, we will acquire the remaining stake in Worldpay from GTCR for a combination of cash and Global Payments stock. The cash consideration payable in our acquisition of Worldpay will be financed with a combination of cash proceeds from the sale of issuer solutions, cash on the balance sheet, and new debt. In terms of net impact to us, we are essentially acquiring an incremental approximately $1.6 billion of adjusted EBITDA, inclusive of run rate synergies, for roughly $10.7 billion, implying a multiple of 6.5 times. We've obtained committed bridge financing and plan to issue $7.7 billion of debt between signing and close, which will be used to replace the bridge commitment and refinance Worldpay's outstanding debt.
At the closing of the transaction, we will issue shares of common stock to GTCR at a price of $97 per share, representing approximately 15% of our outstanding shares on a pro forma basis. The pro forma company will be positioned as a leading pure-play merchant solutions business and will benefit from enhanced scale and significant financial flexibility. Following the transactions, Global Payments will have a combined adjusted net revenue base of approximately $12.5 billion and adjusted EBITDA of approximately $6.5 billion, inclusive of run rate expense synergies. This strong pro forma financial profile and free cash flow generation will position the combined business with significant additional capacity to pursue a balanced capital allocation strategy going forward.
Upon closing, which we anticipate will be in the first half of 2026, the combined company will have approximately 289 million shares outstanding, and pro forma leverage is projected to be approximately 3.5 times on a net debt-to-EBITDA basis. Global Payments is expected to retain its investment-grade credit rating and will quickly delever to our 3-times net leverage target within 18 to 24 months. We expect the transaction to be accretive for the first year post-close and mid to high single-digit accretive thereafter. The combination of Global Payments and Worldpay represents a tremendous value creation opportunity, in part through the realization of substantial synergies. As for expense opportunities, we expect to deliver approximately $600 million of annual run rate cost synergies, primarily by aligning merchant business operations and go-to-market strategies, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures, and realizing scale efficiencies.
Both Global Payments and Worldpay have a strong track record of delivering on expense synergy targets, and we have every confidence in our ability to do so in this transaction. The vast majority of the identified expense synergies are expected to come from areas where our two businesses have overlap. Additionally, Worldpay's existing TSA structure provides near-term synergies that we believe we can action quickly as we transition their infrastructure to our platforms. Importantly, through the integration, we will optimize our cost structure while continuing to invest in innovation and positioning the company for strong growth in the future. We anticipate achieving our full run rate cost benefits within three years. Turning to revenue synergies, we see meaningful cross-selling opportunities for the combined business. Today, Worldpay serves over 1.4 million merchant customers, including more than 500,000 enterprise clients for which Worldpay solves complex digital needs with its best-in-class solutions.
Global Payments intends to extend Worldpay's strength in e-commerce across our combined SMB customer base of more than 6 million merchants globally. Additionally, we will bring Global Payments' differentiated software and commerce enablement solutions to Worldpay's existing customers. Further, as Cameron discussed, the two businesses have highly complementary integrated and embedded capabilities, and together, we will be better positioned to meet our software and platform partners' needs across a variety of operating models. Finally, we will be uniquely positioned to win and attract new customers with our enhanced suite of capabilities and solutions, leveraging the power of our combined and distinctive distribution, all of which is further enhanced by our commercial relationship with FIS. Overall, we are bullish about the growth opportunities of the combined company as we focus on delivering distinctive and differentiated solutions to customers across the most attractive markets worldwide.
Following the close of these transactions, Global Payments will drive attractive adjusted net revenue growth, margin expansion, adjusted earnings per share growth, and free cash flow generation with significantly enhanced financial flexibility. Our adjusted free cash flow conversion is expected to remain strong at more than 90% of adjusted net income annually, providing us with over $13 billion in adjusted free cash flow over three years post-closing to execute against a disciplined capital allocation agenda. This contemplates continuing to reinvest 7% of our adjusted net revenue back into the business, or nearly $1 billion annually, to drive further innovation. We expect to return roughly $7 billion in capital to shareholders from 2025 to 2027, largely consistent with what we outlined at our investor conference last September, and remain committed to managing our net leverage to three times, which we expect to achieve within 18 to 24 months of closing.
This leverage level supports our investment-grade credit ratings long-term while still providing ample capacity to invest for the future and drive shareholder value. Before I turn the call back over to Cameron, I want to briefly highlight our preliminary results for the first quarter of 2025 that we called out in our press release this morning. We currently expect to report adjusted net revenue of $2.2 billion, representing growth of over 5% on a constant currency ex-disposition basis, and adjusted operating margin expansion of approximately 70 basis points, or approximately 40 basis points excluding dispositions. We expect to deliver merchant solutions an adjusted net revenue of $1.7 billion, representing constant currency growth of approximately 6% excluding dispositions, and issuer solutions adjusted net revenue of $529 million, representing constant currency growth of approximately 3%. Adjusted earnings per share are expected to be $2.69, including share-based compensation, or $2.83, excluding share-based compensation.
This reflects adjusted earnings per share growth of approximately 10% on a constant currency basis. These results are consistent with the expectations that we outlined on our fourth quarter earnings call in February. For the full year 2025, we are reaffirming our outlook for adjusted net revenue, adjusted operating margin, and adjusted earnings per share. Finally, as it relates to our medium-term outlook, given the characteristics of the pro forma business, we have even greater conviction in the targets we established and confidence in delivering at the higher end of our adjusted net revenue and EPS growth expectations with higher margin expansion as we realize synergies. With that, now let me turn it back over to Cameron.
Thanks, Josh. Technology continues to transform the payments ecosystem, and together with Worldpay, we will remain at the forefront of the evolution in our industry.
We will be a global leader in merchant solutions, enabling more than $3.7 trillion of volume across a highly diversified and comprehensive portfolio of customers, partners, verticals, and geographies. The combination with Worldpay will accelerate every element of our strategy and transformation and will allow us to sustain leading growth in the future. While we work towards closing these transactions, we will continue to relentlessly execute and complete much of our transformation agenda we outlined at our investor conference in September. As I said at that time, being a scale player in this industry matters more than ever, given the increasingly dynamic environment in which we operate. With Worldpay, we add significant strength and expertise in key fast-growth areas of payments that complement our existing business while further enhancing our offerings with SMBs.
The work we've completed to realign our operating model and business structure, as well as the operational transformation program that we described at our investor conference in September, serves to build a strong foundation in which to quickly and fully integrate Worldpay. We remain committed to operating a streamlined, simplified, and unified organization, and our integration plan for Worldpay will clearly align to this model. Further, by divesting issuer solutions to FIS, we are able to sharpen our strategic focus while still benefiting from a commercial partnership. This outcome aligns with our stated ambitions of accelerating value realization for our issuer business while still realizing the strategic value we envisioned by combining issuer and acquiring capabilities. We could not be more excited about the future as we bring together Global Payments and Worldpay.
This combination enhances our strengths, opens new growth opportunities, and accelerates our transformation, delivering significant value for our customers, partners, team members, and shareholders. The future is indeed very bright for the new Global Payments. Winnie . Before we begin our question-and-answer session, I'd like to ask everyone to limit their questions to one with one follow-up to accommodate everyone in the queue. Thank you. Operator, we'll now go to questions.
Thank you. If you'd like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. Our first question comes from the line of Darren Peller with Wolfe Research.
Please proceed with your question.
Guys, thanks, and congrats on this transformative deal. Can we just start off with, Cameron, maybe help us understand, putting aside financials, just the most differentiated aspects of the pro forma entity, whether it's distribution or technology differentiation, maybe just highlighting the, if you consider, what you consider the top three aspects of the pro forma entity standing out in the world versus competitors, really what you think is the most notable aspects that's going to allow you to grow for many years to come at a rate that's better than industry.
Yeah, thanks, Darrin, for the question. I think it's a great one. As I step back and think about the compelling sort of proposition of putting these two businesses together, I really think about our businesses as kind of hand in glove. I'll start with sort of e-commerce and enterprise.
Worldpay's capabilities are best in class across e-commerce and enterprise, and it allows us to diversify our business away from SMB. As we thought about exiting issuer and becoming pure-play sort of merchant solutions-oriented, we thought it was important to diversify away from SMB and to be able to play across the entirety of the merchant spectrum. Certainly, Worldpay's capabilities across e-commerce and enterprise are completely additive to what we have at Global Payments today and position us, obviously, to benefit from some of the stronger digital trends and faster growth areas we see in payments globally, really tied to the growth of e-com and digital payment solutions. That is a clearly compelling aspect of the pro forma business in an area where, again, we expect to be able to grow at above-market rates.
Certainly, as you look at the integrated and embedded channel, the ability to combine Worldpay's Payrexx asset with what we're already doing today across referral, ProFac, and our existing embedded capabilities from an integrated perspective, I think clearly allows us to have a differentiated offering for software and platform partners globally. We'll be able to serve any software platform partner across any operating model in any way that they desire, really meeting their needs, how and where they want to be met. It significantly expands our integrated and embedded capabilities in a meaningful way. Payrexx is a terrific asset with really strong capabilities in that managed payback space.
Lastly, I would say the combination of our commerce enablement solutions, our point-of-sale offerings, what we can do in SMB, which I do think is best in class as well, with Worldpay's existing distribution and installed base of customers who I think are hungry for better product and capability provides another growth vector for the combined business that we think is really powerful. I know you asked me for three, but I'm just going to step and give you four anyway. I think the fourth thing, and it's really hard to quantify this, but the scale of this business is truly impressive.
Almost $4 trillion a year payment volume, what we can be able to do, what we'll be able to do from a scale economics perspective, combining best-in-class product software capabilities with scale processing economics globally that I think are relatively unmatched, I think is a really compelling value proposition as we move forward in time. As we step back again and thought about how to transform this business aligned with what we laid out at our investor conference back in September, there was no more compelling opportunity, I think, than the transactions that we're announcing today, which is why we're obviously so incredibly enthusiastic about where we're driving the business.
All right. That's helpful. I guess as far as a quick follow-up, I mean, financially, what is the expected pro forma?
I know it's early, but from a top-line standpoint, what do you anticipate is the profile of the pro forma business?
Yeah. Darren knows the Worldpay business has a very similar growth profile to Global Payments, and the business is on, I would say, a very similar trajectory to ours. In fact, I think if you look at our results in our merchant business, for Q1, we grew at approximately 6% constant currency ex-disposition, and Worldpay had similar results. As we think about over the long term, 2026 to 2027 time period, by combining these two businesses, we expect to be positioned to deliver revenue growth at the high end of our medium-term targeted range, which I outlined in my prepared remarks.
The only thing I would add to that, Darrin, is I want to give Stephanie and the team at GTCR a lot of credit for the work that they have done over the last couple of years to sort of accelerate growth in the Worldpay business. They have really leaned into the e-commerce and enterprise channel. That is now nearly 50% of the business, growing at an attractive pace. The Payrexx business is growing at a very attractive pace, and obviously, they continue to invest in that. I think they have stabilized the SMB side of the business in a way that obviously gives us a strong foundation to be able to lean in with our capabilities to drive better growth outcomes.
We're pleased with the growth engine we're buying, and as importantly, we're really pleased with the trajectory of the growth that we see for Worldpay over the next several years.
Right. All right. Great. Thanks again, guys, and congrats.
Thanks, Darrin.
Thank you. Our next question comes from the line of Ramsey El-Assal with Barclays. Please proceed with your question.
Hi. Thanks so much for taking my question this morning, and congratulations from me as well. I wanted to ask for a little bit more color on the revenue synergies. Which of the opportunities that you listed out are sort of the chunkiest? And also maybe if you could overlay sort of the context of timing on your answer. When could we expect you to start realizing revenue synergies? Is there investment required, or is that something where there are opportunities that are more near-term in nature? Thanks.
Yeah.
Thanks, Ramsey, for the question. Maybe I'll start, and I'll have Bob chime in as well. Compelling revenue synergies, obviously, through the transaction, as with any deal, those generally take a little bit longer to materialize because there's typically going to be investment that needs to be made in order to, I think, uncover and unlock some of those opportunities in the business. I would characterize really three main areas where I see significant sort of revenue potential for the business. First is around the e-commerce and enterprise capabilities that Worldpay brings.
Our ability to extend those into markets where we already have physical presences today, where Worldpay does not, and our ability to move up market with better capabilities to be able to unlock, I think, enterprise and e-commerce offerings in markets that Global Payments on a standalone basis hasn't been able to unlock quite as well. I think that's a huge area for us. Secondly is our ability to bring our commerce enablement solutions, our point-of-sale technology, in particular, Genius, into Worldpay's core SMB base to provide them, I think, the product that they're desperately seeking and allowing us a strong installed base to be able to cross-sell into and also to leverage Worldpay's existing distribution channels that are complementary to ours to push more of our product and capability to market. Third is integrated and embedded.
Clearly, the addition of PayRex and our ability to plug that into our suite of offerings to really serve any software platform partner, as I mentioned before, in any way that they need to be served with a variety of different operating models, I think really serves to enhance and turbocharge the things that we can do from an integrated and embedded perspective. I think those are probably the three biggest areas that I would call out, but I'd ask Bob maybe to chime in if he has more color he'd like to provide.
I think Cameron called out the biggest three. The one I might add is the ability to extend omnichannel capabilities in both directions around the globe. There's markets, as Cameron already highlighted, where Global has a strong physical presence today that we can augment with the e-commerce and platform capabilities that Worldpay brings to bear.
There is also the reverse where Worldpay has strong e-com presence but not card presence in markets where we play today. We think the combined strength of the omnichannel offering that can scale from really the smallest SMBs all the way up to the largest enterprise and digital native platforms and customers is really going to be differentiated given the combined footprint of the two businesses.
Got it. Thank you. A follow-up from me. I guess given the complexity of the deal, I presume you guys have been working on it for quite a while. I guess in the meantime, the macro and political environment has really changed quite a bit. How does the transaction sort of change Global Payments' positioning or resiliency in the context of the economic cycle?
Yeah. I think it's a fair question.
Obviously, as you step back and look at the mix of businesses we have today, the issuer business is a stable business and one that is obviously a bit more defensive when you end up in perhaps a little bit more of a choppy macro environment. I would say there's very much attributes of Worldpay that function in a similar way to the issuer business. They have a lot of exposure to everyday spend across grocery, big-box retail areas of the economy that generally outperform or are more stable at a minimum in a more challenged kind of macroeconomic environment. Although we're moving away from an issuer business that does provide some defensiveness, I think we're picking up broader diversification in the merchant business.
We're picking up exposure to segments of the market that are more resilient, I think, in more challenging macroeconomic times if that's what we end up facing. The third thing I'd say is just the scale and scope of the combined business, I think, positions us extraordinarily well through any macro cycle. As Josh highlighted, over the next three years post-closing the transaction, we expect to generate $13 billion of free cash flow. That's an incredible amount of capacity and financial flexibility and strength to be able to manage any sort of macro environment that we find ourselves in. I would say our first quarter results sort of suggest the consumer remains resilient, and those are the trends that we're seeing in April as well. Although consumer sentiment obviously has softened, we're not seeing that manifest itself in reality in terms of consumer spend at this stage.
Obviously, we're positioning the business to be able to ride through any macro environment, and the model that we have around these transactions supports a thesis that allows us to move forward with this transaction today with confidence that irrespective of where we see the macro or the balance of the year and heading into 2026, this business is going to be better positioned for the future by virtue of executing these transactions.
Perfect. Thank you very much.
Thank you. Our next question comes from the line of Jason Kupferberg with Bank of America. Please proceed with your question.
Good morning, guys. Congratulations on the announcement. I wanted to just start on the capital deployment side of things. Can you just clarify what's happening with the buyback specifically in 2025?
I mean, I know you talked about $7 billion through 2027, but if you can just clarify what's happening kind of nearer term prior to the expected close of the transaction.
Yeah. Thanks, Jason. This is Josh. Look, we're very focused on being at three and a half times net leverage post-close. And between now and signing, we'll opportunistically look to repurchase shares, but with a focus on ensuring that our close will not be more than three and a half times leverage.
As Cameron mentioned, the combined business will generate a significant amount of free cash flow, and our adjusted free cash flow conversion is expected to continue to remain strong at more than 90%, which we expect to provide us with more than $8 billion of free cash flow in the first two years of this transaction, enabling us to delever very, very quickly back to our target leverage level at three times within 18-24 months. Jason, we'll be opportunistically in the market between now and closing.
Okay. Understood. Any trust concerns? I mean, merchant acquiring obviously is a pretty fragmented market, but you guys and Worldpay are two of the four biggest players. Curious how you're thinking about that.
Yeah. It's a great question.
As you can imagine, we put a lot of time and effort into thinking through this before endeavoring down this path. I think our perspective is we have a high degree of confidence that there won't be regulatory issues associated with combining these businesses. As I mentioned in my prepared remarks, we view the businesses as highly complementary. There's not that much overlap, frankly, with where we play in the marketplace today. I think that allows for us to have a great deal of confidence that from a regulatory standpoint, we'll be able to move through that process in an orderly fashion and ultimately get the approvals we need to close on the transactions.
Okay. Thanks again.
Thanks, Jason.
Thank you. Our next question comes from the line of Dan Perlin with RBC Capital Markets. Please proceed with your question.
Thanks. Good morning.
Cameron, I appreciate the asset swap concept here. I think it's actually pretty intriguing. My question is, we've seen a lot of these big at-scale acquisitions in this space over the past several or many years now, and most don't work for the long term
or haven't proven to be overly successful.
My question to you is, especially having been involved in one of those, what have you learned from that process previously that you think you're going to be able to bring to this process that's going to enable this to be a successful transaction long term? Thanks.
Yeah. I think it's a fair question. I think you have to look at all these transactions sort of in the context of the environment in which they were done.
As I think about sort of our merger with TSYS back in 2019, I think for our business at the time and for TSYS as well, that was the right thing for us to do. I think the industrial logic was sound. I think building scale the way we did during that period of time and certainly being together through the pandemic was certainly a better outcome for the combined business than it would have been had either one of us been operating kind of on a standalone basis. The other thing I would say is irrespective of how you view it, I strongly believe that our merchant business and our issuer business today are better business by virtue of having done the merger with TSYS back in 2019.
I think as you look at where we are in the context of today, I think the decisions we're making to combine with Worldpay and exit our issuer business by divesting into FIS is the best outcome for both of those businesses. I think with Worldpay, we get a highly complementary business that we have a great deal of confidence that we're going to be able to integrate fully into our new operating model and how we are now running our business in a more seamless, unified manner globally that I think positions this transaction to be successful in the long term. I think importantly, it allows us to sharpen our focus strategically on being a pure-play merchant solution provider with capabilities to serve the entirety of the merchant spectrum.
I think by moving issuer to FIS and divesting in that business, we're putting it with someone who I think is better positioned to grow and scale that business given the extensive relationships they have across large FI communities globally that will drive new growth vectors for issuer business and make it a part of a suite and portfolio of bank and FI-related product and capability that's going to allow them to drive better outcomes for that business. I think the biggest thing for me as I step back and think about it is we have a model today and a discipline around how we think about integrating Worldpay that I think is clearly going to position the business for long-term growth and success.
As I mentioned in an earlier response to a question, as we thought about becoming a pure-play merchant solution provider, which we think strategically having that focus is important for the business, we thought it was incredibly important that we're able to play across the entirety of the merchant spectrum. We didn't think it was quite as prudent to be a pure-play merchant solution provider that's solely focused on one segment of the market, SMB, globally, and by extending our capabilities to be able to play across any merchant client, across any payment experience with any software platform partner, really in virtually almost any market around the world, we think positions this business for success and is going to allow this transaction to be highly value-created for our shareholders.
Yep. That's great. Just a quick follow-up.
There's a lot of demand expectations going into integrated payments within Europe, in particular on point of sale. I'm just wondering, to the extent that this transaction once consummated, how do you think that might improve your ability and positioning to accelerate, I think, some share gains in those markets more broadly, probably on the continent? Thank you. Congrats.
Good question. This is Bob. I think a couple of things. Number one, I don't want to step past the success that Global Payments is having penetrating the integrated space across the regions of Europe where we play today. In fact, as you look at our integrated business around the globe, some of our fastest growth markets are in Europe or in Asia-Pacific.
As those markets mature from a technological matter, it starts to look a lot like the early days in the United States and Canada markets that we've got a strong track record of growing a very successful integrated business. What I think Worldpay adds to that mix is the broad e-commerce capability that allows us to deliver a really compelling omnichannel offering in an integrated play along with the extension capabilities of the PayRex business combined with our managed payment facilitation solutions that we've called ProFac in the past. What Europe and what Asia and what Latin America and some of the other growth markets benefit from is inheriting a matured integrated model with matured capabilities that have already been market-proven in, frankly, our largest market in the United States. Great.
Thank you.
Thank you. Our next question comes from the line of David Koning with Baird.
Please proceed with your question.
Yeah. Hey, guys. Congrats. This seems really good. I guess I wanted to ask, your scale is going to be so big now, 30% or so of the market. Does it make it a challenge now to grow much faster than the market? Should we think kind of retail sales plus a little bit kind of mid-single digits or so over time? Is Worldpay also growing about the same rate as you guys, kind of mid-single digits?
Yeah. David, Cameron, I'll start. I think Josh sort of covered this in his prepared remarks. As we look at the business today, yes, Worldpay is growing at a similar pace to our business.
As I mentioned, I think they've done a nice job over the last couple of years, really accelerating growth largely by leaning into the enterprise and e-com channel, leaning into PayRex and the differentiated capabilities it has and integrated and embedded, and obviously stabilizing kind of the SMB space. I'm also quite sort of pleased and enthusiastic about the trajectory of growth in the Worldpay business, which I think, again, is accelerating as is ours.
As we look at the medium-term outlook that we provided back at our investor conference and we provided our outlook for 2026 and 2027 specifically, as we said, we expect to be towards the higher end of those ranges on both an adjusted net revenue growth and an adjusted earnings per share growth, which sort of implies that you're at the high mid-single digit level or high single-digit growth for the combined business across the next few years once we get past closing.
Thank you. Our next question comes from the line of Adam Frisch with Evercore ISI. Please proceed with your question.
Thanks, guys. Congratulations on what a transformational day it is for you guys. So congrats. Quick question on growth. Obviously, that's what this is all about, I think, over time.
If each business is accelerating a little bit from mid to high single digits over the next couple of years, are there synergies on top of that which kind of could get you into low double digits over time as well? Is that where a lot of the synergies, Cameron, that you alluded to throughout the call come into play, or are we kind of tapped out in the high single-digit range given the size of the new pro forma entity?
Yeah. I mean, I think it's a fair question.
Certainly, as I think about the short to medium term, so call that kind of the medium-term outlook period we talked about, obviously, I think getting into that sort of high single-digit range is a really good outcome for the combined business, particularly given the scale, as you noted, that we're going to have and the sheer volume and size of revenue that we're managing. The revenue synergies, I think, will largely start to materialize sort of beyond that period, maybe into 2027 and beyond. As I mentioned earlier, it takes a little bit of time for those to materialize. Look, I don't want to get ahead of myself.
What I would say is the combination of the combined businesses, the capabilities that we bring, the growth trajectory that we see in our business and their business, plus revenue synergies, it certainly gives us a lot of confidence, I think, around the ability to grow this business at an attractive pace over the next several years as we bring the two businesses together and realize the value creation that we see premised in the underlying combination.
Yeah. Thanks for that. I'll just ask one follow-up about PayRex. And you guys had a ProFac model that we didn't really hear a lot about, but was that part of the contemplation here as well in order to kind of fill a gap that maybe you guys either weren't filling fast enough or were filling but this just expands your capability and reach there around the globe?
If you could just expand on that a little bit because obviously, that's a pretty hot topic around the space these days.
Yeah. Thanks, Adam. It's Bob. That's a good question. I think as you think about the transaction holistically, certainly PayRex as an overall volume or revenue matter wasn't the driving force behind the transaction, although we're very excited about those capabilities. The way that I would think about PayRex as complementary or augmenting the managed payment facilitation capabilities we have today is that this is in part a roadmap accelerator for us. There's a lot of capabilities that we feel very good about, but as we talked about at Investor Day in the fall, part of what we've been doing through transformation is harmonizing those across geographies, across platforms, and whatnot. I think PayRex fills some of those gaps that we were in the process of building.
We do think that it's an accelerator to what we were already doing, but I don't think it's a material pivot relative to our strategy, our competitive positioning. We feel real good about the combined business, but we feel good about both businesses as they're operating today as well.
Okay. Thanks, guys. Good luck to you.
Thank you.
Thank you. Our next question comes from the line of James Faucette with Morgan Stanley. Please proceed with your question.
Hey, good morning, everybody. I wanted to ask in terms of the integration costs and technical components, I guess, how well have you been able to dimensionalize those?
I think one of the concerns that tends to float around in these kinds of deals is there's a lot of commitments, obviously, on capital change as well as growth, but the underlying technology and technology integrations can be complicated, particularly of deals of this size. Wondering how you've been able to dimensionalize those and budget those and what kind of progress we should be able to track, at least from the outside, on progress there.
Yeah. James, yeah, this is Josh. Let me go ahead and I'll start. Look, as we think about the expense synergies, we typically see about one-time cost for those synergies. What I'd say, James, is we have a lot of experience in doing this.
I think if you go back over the last decade, the number of acquisitions that we made, we have a proven formula, and so we think we have a pretty good perspective of it. I think that if you look just historically, we've always been right and around that one-time cost from an overall synergy perspective. I would say the synergies for this transaction in particular, the $600 million that we identified, that's about 18% of Worldpay's total cost base, which is right in line with just overall market trends. We feel really good about kind of how we've dimensionalized and with those overall synergies and is generally right in line with kind of where we've been historically.
James, the other thing I would mention is you just step back and think about sort of approach maybe to the earlier part of your question.
I think clearly we've been on a journey that we talked about extensively around harmonizing, unifying, and simplifying sort of our core operating environments and technology assets that support our business today. We've made substantial progress on that, and we'll continue to make substantial progress over the next year as we're working through kind of the regulatory closing process. I think that gives us a very strong foundation in which to integrate Worldpay to begin with. That's a little bit of a different philosophy, I would say, than how the business was run over the past decade. Having that strong foundation, having that unified, harmonized, and simplified technology and operating environment, I think is clearly a predicate to the integration process.
We clearly have line of sight to our targeted architecture model as we think about combining Worldpay's technology assets with our technology assets, again, with an eye towards how do we leverage the capabilities that they have today, particularly across enterprise, e-com, PayRex, etc. How do we marry that with the strong capabilities we have delivered across the platforms that we manage in a way that, again, allows us to maintain our positioning as a harmonized, unified, and simplified sort of operating environment, but still able to capture the revenue enhancement opportunities and the synergy potential we see bringing the business together. We have a good, obviously, plan articulated currently. We will continue to refine that over the closing period. Obviously, we are excited about the prospects of getting to work doing that so that we can really begin to unlock the value proposition between the two businesses.
I appreciate that. My follow-up question is that obviously, Worldpay and the management of that operation has come under a new team over the last couple of years. Are there any things that you have noticed from them, whether it be improvements or change in market positioning or presence over the last couple of years that were particularly appealing or at least intriguing to you from where you sit?
Yeah. I think it's a great question. I would reiterate sort of the compliments that I gave to Stephanie, GTCR, Charles, and the team at Worldpay. I think they've done a really terrific job sort of stabilizing the business, getting it back to an attractive growth profile, and really putting it in a trajectory to continue to accelerate growth as we look forward for the next several years.
I think it starts with the significant investments they've made in e-commerce and enterprise. The capabilities that they have there are clearly best in class and compete favorably with other best-of-breed players across that spectrum globally. It shows, I think, in the growth rates and the wins that they've been able to generate in that channel in particular that we're obviously excited about adding to the overall Global Payments enterprise. Clearly, they've proven PayRex is the quality asset that we knew it was.
The traction that they've been able to achieve in the market with both PayRex and their true payment facilitation capabilities obviously demonstrates that they have good, strong offerings in the integrated and embedded channel that, as Bob highlighted, augment the strategies that we're pursuing and help accelerate some of the roadmap we had around being able to deliver across a full spectrum of operating models to software and platform partners around the world as well. As I mentioned, I think they've stabilized the SMB book. I think what we're able to bring to their SMB base of customers from a product capability, particularly with Genius POS and the commerce enablement solutions that we're deploying in our business today that are driving growth for us, are going to help to, again, improve the outcomes across their sort of core SMB channel as we move forward in time.
We're excited about the prospects of the set of putting the two businesses together. We feel good about the growth that Worldpay is seeing today and, as importantly, kind of the trajectory we're on or they're on and we'll be on together to continue to accelerate that growth over the next several years.
Thank you. Our next question comes from the line of Andrew Schmidt with Citi. Please proceed with your question.
Hey, guys. Thanks for taking my questions and congrats on this deal. I know Worldpay has been looking for more SMB exposure for a while, so it's good to see that come to fruition. I wanted to just double-click on the last question, just the integration details. I think first half of 2026, I believe your operational transformation plan is still underway, yet that's the timing that this deal is planned to close.
Could you just maybe go into a little more detail in terms of managing both the operational transformation of the core business while integrating Worldpay? I know you're creating a more solid base for the Worldpay acquisition, but would love to get some more details on the integration plan. Thanks so much.
Yeah. I think it's a really good question, and it's obviously an important part of how we thought about this transaction. Good or bad, we live in a world where the regulatory approval cycle takes some time, particularly when you're dealing with businesses like the ones we're dealing with. Look, having that year between signing and close to be able to continue to make progress on our own transformation agenda internally at Global Payments, I think, is a good thing.
We're really pleased with the progress that we've made over the last probably six to eight months since we've launched that program. Really feel good about the momentum we have in the business around our transformation journey and where we're heading, as well as the progress that we've been able to make. Certainly, having some time between signing and closing to be able to make additional progress and make sure that we have the foundation that we expect to have to be able to integrate Worldpay, I think, is an important consideration as we thought about the transaction. If this were a transaction that we were closing tomorrow, I would probably feel differently about it. I think having that period of time to continue with our transformation journey, I think if we get into the first half of 2026, much of that work will be behind us.
I think the things that we'll still have left to complete will be augmented and enhanced by virtue of being able to bring Worldpay into the conversation. I think short story is we're going to have a very strong foundation. We have a unified operating model. We have a realigned organization. We're operating effectively. We're building momentum. We're doing all the things that we said we were going to do as part of our transformation to harmonize, unify, and simplify our business. By the time we get to close, much of that work will be done, and we will look forward to integrating Worldpay into that new model and then, obviously, realizing the synergies that Josh highlighted earlier as we bring the two businesses together. We feel good about how the timing dovetails with the work that we already have in progress around our own transformation. Perfect.
Thank you so much for that, Cameron. Maybe I could just ask about bank distribution. It sounds like that's an important element of this deal as well. Could you just talk about how that opportunity might play out? I can envision maybe perhaps Genius distribution and things like that, but maybe some flavor in terms of what that opportunity looks like. Thanks so much.
Yeah. I think about it as, and we talked a little bit about this at the Investor Conference. I'll let Bob add a couple of comments as well. Look, our philosophy around distribution is we want to leverage all of our distinctive distribution channels globally to push our product and capability to market. That's a different philosophy than I think we ran the company with previously.
I think adding, obviously, Worldpay's base of FI partners that I think represents, at least in the U.S., something like 6,000 branch sort of opportunities, plus their other non-FI partners, just provides more expansive distribution by which we can bring products like Genius and our other commerce enablement solutions to market in a more effective manner. Look, there's a little bit of flooding the market with our product and capability. That's a big part of what we're trying to accomplish. We're unlocking that within our own business across all of our distribution channels. I think adding more diversified distribution and complementary distribution to what it is we're trying to do as a business is only additive as it relates to being able to bring more product and capability and drive better growth rates for the combined business long term.
Bob, I do not know if you would expand on that at all.
Maybe just two quick things. We have talked about it before, and I am sure you are well aware, Andrew, that banks across the spectrum, whether they are small regionals or they are large nationals or multinationals, are really looking for technology solutions to sell and augment their existing deposit, treasury, other sorts of relationships. We are well positioned in the combined world with Worldpay to deliver the sort of software-based commerce enablement technologies that banks are looking to use to differentiate their own value proposition. The second thing I would say is just dovetailing on the last part of Cameron's comment about the complementary nature of this. Global Payments today has a very strong FI distribution network, but we tend to work with smaller banks than Worldpay does.
There is not a lot of overlap, which we think is really compelling to give us capabilities with small regional banks all the way up to national and multinational banks, some of which we partner with outside the U.S. and some that Worldpay is partnering with here. It is very broad-based distribution with the right capabilities that banks are looking for and customers are hungry for.
I would just add one more comment to that, and I'll put a little bit of a plug in for the commercial partnership with FIS, which is, I think, an important element of this transaction that has not gotten quite as much airtime today.
Look, Stephanie and I have known each other for a decade, and when we originally talked about this in concept, one of the important elements of doing something together involved a broader commercial relationship that would allow us to marry the benefits that FIS brings to the FI channel, particularly around core banking, treasury management, their money solutions. By adding issuer processing capabilities around credit into that, give them a better, more holistic offering, being able to then combine that with our merchant capabilities to bring a holistic solution to FIs, I think, is a very powerful opportunity for the combined sort of Global Payments/Worldpay business going forward, but also for Stephanie's business at FIS.
We feel good about that element of the transaction because it allows us to continue to unlock the value that we see in being a cross-merchant and issuer, but it also allows us, I think, to have a more holistic proposition for FIs together than either of us was able to do on a standalone basis in the past.
Got it. Thank you so much.
Thanks for the question. That concludes our call this morning. Again, I do want to thank you for joining us early this morning on what is truly a monumental day for Global Payments. As I hope you can tell from our conversation this morning, we're incredibly excited about the prospects of combining with Worldpay, and we look forward to also divesting our business in issuer to FIS and the outcomes that they'll be able to drive together as we move forward.
Thank you again for your time, attention, and support this morning, and we look forward to continuing our conversations from here. Have a great day, everyone.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.