KKR’s Acquisition of First Data
On April 2, 2007, First Data Corp. announced that it had entered into an agreement to be acquired by an affiliate of Kohlberg Kravis Roberts (KKR) & Co in a transaction valued at $29 billion. First Data shareholders received $34 in cash for each share of First Data common stock held which represented a premium of approximately 26% over First Data’s closing price of $26.90 as on March 30, 2007, and a premium of approximately 34% over the average closing price during the previous 30 trading days. First Data being a privately owned company was delisted from the New York Stock Exchange on September 24, 2007. This leveraged buyout by KKR was financed with $24 billion in debt. It was the second largest buyout ever. According to Reuter estimates, at $34 per share, KKR paid 27 times its estimated 2007 earnings of $1.24 per share. On the basis of $26.4 billion equity value, KKR paid approximately 14 times estimated 2007 EBITDA of $1.9 billion. The deal came about 6 months after First Data spun off Western Union.
- Annual Report (2017). https://investor.firstdata.com/annual-reports-and-proxy-statement
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- Grantham R (2012) KKR buyout saddled First Data with massive debt. https://www.ajc.com/business/kkr-buyout-saddled-first-data-with-massive-debt/KumrcBUZpV1VFgqCEu6jxK/. Accessed 03 Aug 2018
- Primack D (2014) Why KKR is doubling down on first data. http://fortune.com/2014/06/19/why-kkr-is-doubling-down-on-first-data/. Accessed 03 Aug 2018
- Reuters News (2007) First Data agrees to be sold to KKR for $29 bl. https://www.reuters.com/article/us-firstdata-kkr/first-data-agrees-to-be-sold-to-kkr-for-29-bln-idUSN0238467320070402. Accessed 03 Aug 2018