First Data has taken its initial step towards a multibillion-dollar listing.
First Data filed its paperwork for an IPO on Monday, but gave few details on the upcoming
deal. The filing said it could raise $100m in the offering, but this was a place holder amount that is certain to change and no underwriters were listed. KKR will continue to control the company after the IPO through a dual-class share structure.
The company, which was taken private in 2007, floundered under a hefty debt burden in the aftermath of the financial crisis, reporting losses and rotating through five chief executives. First Data plans to use proceeds from the IPO to repay debt, which still totals about $20bn, according to the filing – reports the FT.
At the depths, KKR held First Data on its books at 60 cents on the dollar, the FT reported in 2014, but Frank Bisignano, the former JPMorgan Chase co-chief operating officer who came in as CEO in April 2013, has worked to revive the company.
“Yes, the business had its challenges — continuous management change, a restructuring plan largely based on selling assets, $24.5bn of debt, and flat revenue growth the year before I joined,” Mr Bisignano said in a letter in the filing. “But I knew that payments was a growth industry, that technology was the great enabler, and that First Data had a fabulous set of assets and clients with whom it could do so much more.”
The company shored up its balance sheet last year, when KKR led an unusual $3.5bn equity injection, which included $700m from its own balance sheet and $500m from the 2006 fund that made the initial investment. That made First Data KKR’s largest investment and helped mend the group’s capital structure.
KKR has valued its initial investment at cost, marking it up from 80 cents on the dollar last year, and the second financing at above cost, the FT has reported.
In its IPO prospectus, First Data says it is the largest merchant acquirer, issuer processor, and independent network services provider in the world, processing 74bn transactions globally, or more than 2,300 per second, in 2014. In the US, First Data acquired $1.7tn of payment volume, accounting for nearly 10 per cent of gross domestic product last year.
Revenue last year rose 3 per cent to $11.2bn from the year earlier, while its net loss reduced from $692m to $265m.