First Data Aims to Raise $3B with October IPO (Oct. 1, 2015)
Although it may not be as large as analysts initially predicted, First Data Corp.’s IPO could be the largest public offering of 2015. The Atlanta-based payments processing and technology company has unveiled plans to raise around $3 billion by selling 160 million shares at between $18 and $20 per share, according to an amended S-1 filing with the SEC.
First Data began officially exploring an IPO earlier this year, eight years after being acquired by private equity firm Kohlberg Kravis Roberts & Co. (KKR) in 2007, at the height of that period’s leveraged buyout boom. Before that, First Data had operated as a publicly traded company for 15 years, following a spinoff from American Express in 1992. The cash the company will earn from its return to the public markets will enable it to pay down some of the more than $20 billion in debt used to finance the 2007 buyout. KKR will remain First Data’s largest shareholder after the IPO, controlling about 60 percent of company shares, compared with 75 percent before the offering. First Data has been working to improve its financials and streamline its operations in preparation for the IPO; the company turned its first quarterly profit in seven years at the end of 2014 and has seen year-over-year revenue gains for the past six quarters.
So far this year, only two companies have broken the $1 billion mark with IPOs—Tallgrass Energy and Columbia Pipeline Partners—and the total number of IPOs thus far is just 138, down 35 percent from last year, according to Renaissance Capital.