First Data Seeks to Raise as Much as $3.2 Billion in IPO

First Data IPO to Offer 160 Million Shares at $18-$20
  • Deal may be biggest U.S. initial public offering this year
  • Top end of range would value company at about $17.58 billion

First Data Corp., the payments processor taken private by KKR & Co. eight years ago, is seeking to raise as much as $3.2 billion in what’s poised to be the biggest U.S. initial public offering this year.

The New York-based company is selling 160 million shares priced at $18 to $20 each, according to a regulatory filing Thursday. At the top end of the range, the sale would value the company at about $17.58 billion, based on the 879 million million shares of common stock that will be outstanding after the offering.

First Data processes payments for banks and merchants and offers a variety of other services and products, such as systems for accepting credit cards and preventing fraud.

The company has proved to be the biggest equity bet for KKR, the private-equity firm that acquired First Data in 2007 for $29.8 billion, including debt and fees. Proceeds from the IPO will be used to prune the company’s about $21 billion of debt, which KKR used to finance its buyout. An IPO priced at the $19 midpoint would value KKR’s stake at $5.3 billion, or about 35 percent higher than its $3.9 billion investment, its biggest equity position in a company, according to data compiled by Bloomberg.

Cut Debt

After cycling through a succession of chief executive officers, KKR recruited Frank Bisignano in 2013 from JPMorgan Chase & Co. to run First Data. In 2014, KKR led a $3.5 billion equity infusion to cut debt and kick-start acquisitions -- chipping in an additional $1.2 billion of its own funds.

The biggest U.S. IPOs this year by offering size include Tallgrass Energy GP LP, which raised $1.4 billion; Columbia Pipeline Partners LP; Univar Inc. and Fitbit Inc., according to data compiled by Bloomberg.

Citigroup Inc., Morgan Stanley, Bank of America Corp.’s Merrill Lynch and KKR are acting as joint bookrunning managers of the First Data IPO. Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc, Mizuho Securities, PNC Capital Markets, SunTrust Robinson Humphrey Inc. and Wells Fargo & Co. are bookrunners, and Allen & Co., Banco Bilbao Vizcaya Argentaria SA and Cowen & Co. are co-managers, according to the filing.

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