RiskMay 9, 2023

Florida Pension Sues Fidelity National Over Worldpay Deal

The fintech firm is accused of failing to disclose material information that led to a $17.6 billon write-down.

Reported by Michael Katz

A Florida pension fund has filed a securities class action lawsuit against Fidelity National Information Services Inc. for allegedly failing to disclose material information related to its $43 billion acquisition of payments company Worldpay Inc.

The complaint, filed by the Palm Bay Police and Firefighters Pension Fund, alleges that the acquisition led to a goodwill impairment charge of $17.6 billion that caused the company’s stock to drop sharply.

The lawsuit centers on Jacksonville, Florida-based Fidelity National’s $43 billion acquisition of payments company Worldpay in 2019. With the acquisition, Worldpay became part of Fidelity National’s Merchant Solutions segment. The pension fund alleges that Fidelity National and its executives made false and misleading statements about the Worldpay acquisition by assuring investors it had “successfully completed the Worldpay integration” and touted the benefits for the company of the integration of Worldpay.

“Investors slowly learned that the company’s important Merchant Solutions segment was underperforming and that the company’s integration of Worldpay was not ‘successfully completed,’” the complaint alleges.

According to the complaint, on August 4, 2022, Fidelity National announced that James Woodall, its chief financial officer, planned to step down three months later, an announcement that allegedly caused the stock to fall more than 7%. The complaint notes that “other management changes soon followed.” The lawsuit adds that on November 3, 2022, Fidelity National reported that its Merchant Solutions segment suffered a “margin contraction of 430 basis points,” which allegedly caused Fidelity National’s stock price to plunge more than 29%.

Finally, before the markets opened on February 13 of this year, Fidelity National announced it would spin off Worldpay and that it would result in a $17.6 billion write-down on the asset, which allegedly caused the stock to drop 12%.

“As a result of defendants’ wrongful acts and misleading statements, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant losses and damages,” the complaint says.

The lawsuit alleges that Woodall, then-CEO Gary Norcross and President Stephanie Ferris knew that adverse facts about the company had “not been disclosed to and were being concealed from the public and that the positive representations being made were then materially false and misleading.”

Representatives from Fidelity National Information Services did not immediately respond to a request for comment.