The most powerful woman in fintech is on the hunt for acquisitions

Just months after completing one of the biggest deals of her career, Stephanie Ferris, CEO of National Loyalty Information Services, has a message for everyone: the FIS cannot be done. Ferris and the company she leads are trying to get back into purchasing.

In February the FIS the sale closed of a majority stake in WorldPay to GTCR, a Chicago buyout shop. The transaction helped FIS reduce its total debt, which had increased by approx $19.1 billion at the end of 2023, at approximately $10 billion once the sale is completed. As of March 31, FIS’s debt stood at $11.2 billion while its leverage ratio was about 2.7 times, a spokesperson said.

The deleveraging means FIS is resetting its mergers and acquisitions agenda, Ferris said. The Jacksonville company provides fintech software to merchants, banks and capital markets firms. FIS is setting aside about $1 billion a year for the deals and will target small, synergistic products that the company currently doesn’t have or doesn’t have enough time to build organically, he said. Last year’s purchase of Bond Financial Technologies, a banking-as-a-service startup, was an acquisition, something FIS isn’t trying to replicate this time around. “We’re really looking for products or companies that have revenue and EBITDA and a proven business model,” Ferris said.

Any acquisitions will be in areas that FIS is looking to grow, such as digital and payments capabilities in the banking space and commercial lending technology in the capital markets sector, he said. FIS will not seek to do one large transaction but multiple smaller deals. For a company to attract FIS’s interest, it would have to have revenue of between $150 million and $200 million, otherwise “it’s not really a business but just a product and it doesn’t have enough customers for us,” Ferris said.

Ferris spoke to Fortune last week after wrapping up a triumphant day for investors. FIS on March 6th reported first quarter earnings that exceeded expectations. The results marked the fifth quarter during Ferris’ tenure that FIS met or exceeded earnings expectations. The FIS also announced it the launch by Atelio, which enables financial institutions, businesses and software developers to embed financial services into their offerings. Atelio already has three customers: KeyBank, College Ave and RoyalPay. (Atelio features Bond executives including Roy Ng, Bond co-founder and CEO, who is EVP, chief business officer of FIS Platform and Enterprise Solutions.)

“It has been a very challenging first 18 months, both within the FIS and externally. I’m really happy with where we are,” Ferris said.

Ferris’ start as CEO of FIS was not easy. You were given the reins of a large publicly traded fintech that was in trouble. FIS’s heavy debt load meant the company could only complete one acquisition, worth around $800 million Payrix purchase in 2021, from 2019 to 2022.

In February 2023, a few months after Ferris became CEO, FIS announced plans to do so spin off WorldPay. He launched a sales process in April and signed a contract with a buyer for WorldPay by July, he said. The WorldPay trial has attracted a lot of interest, especially among private equity firms, among which Advent International is said to be in the running. Ferris declined to comment. “We moved quickly. Agreements die if they last a long time,” she said.

The decision to sell a majority of WorldPay meant Ferris was canceling one of the biggest payments deals of 2019. There were several that year. Fiserv acquired First Data for 22 billion dollars, while Global payments harvest TSYS for $21.5 billion and Worldline bought Ingenico for 7.8 billion euros.

FIS’s purchase of WorldPay “was a bad decision,” said Dan Dolev, senior fintech equity research analyst at Mizuho Securities USA. FIS purchased WorldPay at a time of peak consolidation for processors. WorldPay didn’t have a branded point-of-sale terminal for small businesses, like Fiserv has with Clover or Square has with Square POS, Dolev said. All of WorldPay’s competitors had a branded POS, which made it difficult to compete, Dolev said.

“[Ferris] it was very courageous to resolve the merger,” Dolev said. FIS shares also rebounded after falling to a 52-week low of $47.16 in October. The stock closed at $76.39 on Tuesday, up about 62%.

What is FIS?

FIS is one of the largest financial services companies in the world. Its software powers many of the largest private equity firms and 95% of… Forbes 2024 The best bank in the world list, Ferris said. FIS technology “underpins the entire financial services industry,” she said.

The FIS is so important that in March 2023, when several regional banks, including Silicon Valley Bank AND Signature Bank, collapsed, many CEOs of banks large and small turned to Ferris to ensure their systems continued to run smoothly, he said. That responsibility is an honor and privilege that Ferris says he takes seriously: “I’m an FIS steward…I make sure we’re here every day for our customers.”

Ferris, who has spent his entire career in finance, including as CFO of WorldPay, doesn’t think there will be a banking crisis in 2023. The financial system is very strong, according to Ferris.

“In fact, what we saw was more accounts opened throughout the banking system. More deposit accounts have been opened than the idea of ​​people taking their money out, running away and putting it out of their banks,” she said.

Ferris has spent his entire career in finance and has held many roles. You have been CFO, COO, president and now CEO of one of the largest fintech companies. That makes her the most powerful woman in fintech, an honor she Ferris said she doesn’t think about. “There was always a group of guys in a room. Since I grew up this way, it doesn’t really bother me,” she said.

When it comes to colleagues, Ferris points to Jane Fraser, CEO of Citigroup, who she says is “badass.” As the only woman to run one of the largest banks, Fraser has a tall order, Ferris said. “I think she’s fantastic,” she said.

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