Private Equity Firm KKR to Buy First Data; Plans to Invest in Tech
DENVER - Electronic commerce and payment solutions provider First Data Corp. yesterday agreed to be bought by an affiliate of private equity firm Kohlberg Kravis Roberts & Co. (KKR) in a transaction with a total value of approximately $29 billion.
Under the agreement, First Data shareholders will receive $34 in cash for each share of First Data common stock they hold, representing a premium of approximately 26 percent over First Data's closing share price of $26.90 on March 30, 2007 and a premium of approximately 34 percent over the average closing share price during the previous 30 trading days.
"Under the direction of a world-class management team and with the strong support of its committed employees, First Data is at the forefront of the worldwide trend toward electronic payments," KKR Member Scott Nuttall said. "We believe that through continued investments in its technology, people, and customer relationships, First Data will build on its history of innovation and industry leadership."
Since its initial public offering in 1992, First Data has grown from $1.2 billion in annual revenue to $10.6 billion prior to the spin-off of Western Union and $7.1 billion post spin-off.
The companies expect to close the deal by the end of Q3 2007.
First Data serves 4.9 million merchant locations, 1,900 card issuers, and their customers, Its portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions.
Under the agreement, First Data shareholders will receive $34 in cash for each share of First Data common stock they hold, representing a premium of approximately 26 percent over First Data's closing share price of $26.90 on March 30, 2007 and a premium of approximately 34 percent over the average closing share price during the previous 30 trading days.
"Under the direction of a world-class management team and with the strong support of its committed employees, First Data is at the forefront of the worldwide trend toward electronic payments," KKR Member Scott Nuttall said. "We believe that through continued investments in its technology, people, and customer relationships, First Data will build on its history of innovation and industry leadership."
Since its initial public offering in 1992, First Data has grown from $1.2 billion in annual revenue to $10.6 billion prior to the spin-off of Western Union and $7.1 billion post spin-off.
The companies expect to close the deal by the end of Q3 2007.
First Data serves 4.9 million merchant locations, 1,900 card issuers, and their customers, Its portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions.