First Data’s Loss Narrows as Revenue Increases Ahead of IPO

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KKR & Co.’s First Data Corp. narrowed its quarterly loss as the payments company prepares for an initial public offering that could be this year’s biggest.

The second-quarter loss was $26 million, compared with $34 million a year earlier, First Data said Wednesday in a statement. Consolidated revenue rose 1.2 percent to $2.87 billion. Revenue from its three main businesses also rose about 1 percent as it earned more from providing payment services to merchants and helped them prevent fraud.

First Data Chief Executive Officer Frank Bisignano filed this month for an IPO, eight years after the company went private in what’s become KKR’s biggest bet. First Data, which has grappled with mounting debt and cycled through a succession of CEOs, last year had its first quarterly profit since the buyout. It later posted a loss in the first quarter.

First Data runs a debit-card network, processes bank-card transactions and provides data analytics and other services to merchants. Under Bisignano’s leadership, the company has revived in large part by adding capabilities through acquisitions such as Clover Network Inc., a cloud-based payment software developer; Perka Inc., a digital rewards-program designer; Gyft Inc., a mobile gift-card company; and Transaction Wireless Inc., a digital gift-card distribution platform it bought this month.

The company changed how it reports earnings in the second quarter, organizing operations into three key segments -- business solutions; financial solutions; and network and security solutions.

KKR valued its First Data stake at $4.5 billion as of June 30, the firm’s head of global capital and asset management, Scott Nuttall, said last week. That’s 15 percent more than KKR’s $3.9 billion equity investment, the largest the firm has made in a company in its 39-year history.

First Data plans to use the proceeds from the IPO to repay debt and plans to start interviewing bankers for the deal this week, people familiar with the matter have said.

Shares of KKR gained 1.7 percent to $24.60 at 4 p.m. on Wednesday in New York. The stock has climbed 6 percent so far this year.

(An earlier version of this story corrected the date of the Transaction Wireless deal.)

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