First Data Readies for Multibillion-Dollar IPO (July 21, 2015)
Less than a decade after a private equity firm took the company private, First Data Corp. announced Monday it has filed documents with the SEC relating to an IPO of its common stock. The number of shares to be offered, the price range and the stock exchange listing for the offering have not yet been determined, according to the Atlanta-based payment processor. First Data said it intends to use the net proceeds from the offering for the repayment of certain debts, among other uses. Observers estimate the IPO could raise between $25 billion and $40 billion.
“First Data offers investors the opportunity to join what I believe will be one of the most significant transformations in our industry,” CEO Frank Bisignano said in the filing. “We will focus on three main areas: growing First Data profitably, continuing to improve our balance sheet through deleveraging and opportunistic debt refinancing, and building a durable enterprise that can withstand the uncertainties of our global economy.”
First Data Corp. (FDC) ended a 25-year stretch as a publicly traded company in 2007 after private equity firm Kohlberg Kravis Roberts & Co. (KKR) bought the company for $29 billion. Part of the proceeds from the IPO will be used to repay some of the $20 billion of debt that was used to finance the 2007 buyout by KKR, according to reports.
First Data has been working on improving its financials and streamlining its operations for some time in preparation for the IPO, according to Rick Oglesby, research director for Double Diamond Group. “[First Data] has been carrying a lot of debt since the acquisition by KKR, which has been like a heavy weight the company has had to carry everywhere it has gone,” he tells Paybefore. “The IPO should help alleviate that burden, enabling improved cash flow and profitability, thereby helping First Data compete more effectively.”