First Data Announces Potentially Record-Breaking $3.2 Billion IPO

October 2, 2015 by
First Data Announces Potentially Record-Breaking $3.2 Billion IPO

First Data, a New York-based payments processor, is aiming to raise as much as $3.2 billion in its initial public offering. The launch would make the event the largest U.S. listing for 2015.

In 2007, the company was acquired by KKR, a private-equity firm, for $26 billion. Since then, it has grown exponentially to cater to a myriad of small businesses worldwide. Customers use the network service to process both credit and debit card payments.

“First Data intends to use the net proceeds from the offering to redeem all $510 million aggregate principal amount of its 11.25% senior unsecured notes due 2021, approximately $2.0 billion aggregate principal amount of its 12.625% senior unsecured notes due 2021, and to pay applicable premiums and related fees and expenses, and for general corporate purposes,” mentioned the company in the official press release.

Initially, the group plans to open up five percent of the offering to clients and employees. Based on the regulatory filing, shares will start at $18 to $20 each. In the best possible outcome, the company could reach a value of $18 billion, if it sells its shares in the high price range.

Despite early rumors, KKR will not be selling any shares in the IPO. However, the event could finally allow the firm to make an exit from its largest investment.

“In other words, even eight years after its leveraged buyout, it is still heavily leveraged. If First Data can’t complete its IPO in this environment, KKR could be stuck holding this company for years to come,” wrote Aaron Elstein, senior reporter at Crain’s New York Business.

After a long history of underperforming, First Data finally turned a quarterly profit in 2014. With a history of posting year-over-year revenue gains in the past six quarters, the group is riding on strong momentum behind its IPO.

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