In January 2018, Vantiv Inc's $10 billion acquisition of London-based Worldpay Group was finalized. The new company, still headquartered in Cincinnati but renamed Worldpay Inc (NYSE:WP), reported its 2017 fourth-quarter results last month and provided guidance on what life will look like for the new company. If results play out the way management believes, Worldpay shareholders should be very happy for several years.

For the year, the two legacy companies showed solid growth, though comparables will be messy over the next year as the new Worldpay digests merger and acquisition costs. The legacy Vantiv company recorded net revenue of $569 million, a 13% increase year over year, and adjusted net income per share of $0.97, a 29% increase year over year. The legacy Worldpay Group reported net revenue of $317 million, a currency-neutral 7% increase year over year, and underlying EBITDA of $143 million, a currency-neutral 11% increase year over year.

A customer makes a purchase using a contactless credit card reader.

The newly formed Worldpay believes it can be a leader in the payment processing industry. While much remains to be seen, early signs look promising. Image source: Getty Images.

The new Worldpay is expecting to earn $3.8 billion to $3.89 billion in revenue and $3.66 to $3.76 in adjusted earnings per share this fiscal year. The company expects to recognize revenue and cost synergies over the next three years, believing the newly formed whole will prove to be greater than the sum of its parts. Of course, the question for investors to ponder is whether these synergistic goals are realistic.

A "terrific start"

There is reason to believe these goals will be met if the management team can execute. In 2015, Global Payments Inc (NYSE:GPN) acquired Heartland Payments for $4.3 billion and has since recognized cost synergies and margin expansion as its stock price soared. Worldpay is guiding to capture cost synergies worth $200 million over the next three years, $45 million of which will be captured this year.

During the company's conference call, CFO Stephanie Ferris said the "lion's share" of the cost synergies would come as the legacy Worldpay company is integrated into the legacy Vantiv's payment platform in the U.S. Ferris expects that transition to take place in the first half of 2019. When pressed during the conference call's question-and-answer session about whether the company would meet these cost synergy goals, Ferris replied that the company was confident it would be able to execute in a timely manner and with the least amount of disruption to the company's clients as possible.

Co-CEO Charles Drucker said, "Worldpay is off to a terrific start and our combination is already delivering solid results."

A number of advantages

The new Worldpay finds itself in an enviable position. The company begins its life as the largest payment processing company in the U.S. and the U.K., the two largest payments markets in the world. This scale opens up enormous advantages for the company, including significant operating leverage. If managed correctly, this will allow the company to innovate more efficiently and cost effectively than its many competitors. According to Co-CEO Philip Jansen that is exactly how Worldpay is intending to exploit its advantage:

In this industry, scale is an asset and so is the ability to innovate. What is uncommon is having the combination of both. We have the size and unmatched global scale to compete and win new business across the ecosystem. With the combined heritage Vantiv and Worldpay, we now spread the cost of implementing new technologies over more than 40 billion transactions annually, keeping us competitive on price and enabling us to earn best-in-class margins.

If true, Worldpay will be a formidable competitor in the payments space for years. Judging by the early signs, there are reasons for shareholders to be optimistic. Jansen said one of the ways the company intends to keep growing is by targeting "high-growth vertical markets" that show an "accelerating adopting" of card and digital payments. Jansen pointed to past examples of how the company targeted verticals in grocery, travel, and digital markets and cited entertainment, gaming, and healthcare as future verticals being looked at.

Another strength for the new Worldpay is its position in e-commerce or, more specifically, cross-border e-commerce. Jansen noted that while global e-commerce payment volume is expected to grow in the high teens over the next few years, cross-border e-commerce is projected to grow even faster -- by as much as 25% per year. Worldpay is already the worldwide leader in processing online payments and cross-border e-commerce transactions, and it expects to maintain its leadership by offering its clients a one-stop shop for currency, regulatory, and payment method difficulties inherent in international trade.

A World(pay) of possibilities

If Worldpay management is to be believed, its customers are excited about the two legacy companies integrating their operations over the next three years. Drucker said the company's clients "recognize the potential of the new Worldpay." Jansen added that Worldpay's customers were "looking forward to us expanding" with them over the next few years.

Of course, the company still must execute these integrations in a way that minimizes disruption to its existing customer base and thoughtfully blends the two former companies' best capabilities into a unified whole. This is easier said than done. The payment processing industry is more crowded than ever with innovative and technologically savvy competitors, meaning, if Worldpay fails to execute, these smaller players in the field can steal market share fast. Yet the vision is there, and the new company's management seems to get what's at stake. If it can execute its integration plan, it can continue to be a leader in this space for years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.