First Data Shareholders to Receive $34 per Share in Cash;
Transaction Valued at $29 Billion
First Data Shareholders to Receive $34 per Share in Cash;
Transaction Valued at $29 Billion
First Data Corp. (NYSE: FDC) today announced that it has entered into an agreement to be acquired by an affiliate of Kohlberg Kravis Roberts & Co. (KKR) in a transaction with a total value of approximately $29 billion.
The agreement was unanimously approved by the First Data Board of Directors based upon the recommendation of the Strategic Review Committee comprised of three independent directors. Under the agreement, First Data shareholders will receive $34 in cash for each share of First Data common stock they hold, representing a premium of approximately 26% over First Data’s closing share price of $26.90 on March 30, 2007 and a premium of approximately 34% over the average closing share price during the previous 30 trading days.
Chairman and Chief Executive Officer of First Data Ric Duques said, “We are pleased to reach this agreement with one of the world’s largest and most successful private equity firms. We believe that current market conditions present an exceptional opportunity to fulfill our commitment to maximize the value of First Data by delivering an immediate cash premium to our shareholders.”
KKR Member Scott Nuttall added, "Under the direction of a world-class management team and with the strong support of its committed employees, First Data is at the forefront of the worldwide trend toward electronic payments. We believe that through continued investments in its technology, people and customer relationships, First Data will build on its history of innovation and industry leadership. We look forward to working closely with First Data's management team and clients to grow the franchise in the years ahead."
Since its initial public offering in 1992, First Data has grown from $1.2 billion in annual revenue to $10.6 billion prior to the spin-off of Western Union and $7.1 billion post spin-off. An investment in the company’s IPO, adjusted for the recent spin-off of Western Union, would have generated 18 percent compounded annual returns for First Data’s shareholders versus 9 percent for the S&P 500.
First Data intends to tender for all of its outstanding bonds in conjunction with closing.
Under the merger agreement, First Data may solicit proposals from third parties during the next 50 days. In accordance with the agreement, the Board of Directors of First Data, through its Strategic Review Committee and with the assistance of its independent advisors, intends to actively solicit proposals during this period. First Data advises that there can be no assurance that the solicitation of proposals will result in an alternative transaction. First Data does not intend to disclose developments with respect to the solicitation process unless and until its Board of Directors has made a decision.
Completion of the transaction, which is subject to the approval of First Data shareholders, regulatory approvals and customary closing conditions, is expected by the end of the third quarter of 2007. The transaction is not conditioned upon receipt of financing by the investor group.
A partner of the First Data in Lithuania is the Penki kontinentai, JSC.