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KKR’s Acquisition of First Data

  • B. Rajesh Kumar
Chapter
Part of the Management for Professionals book series (MANAGPROF)

Abstract

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.

References

  1. Berman DK, Bauerlein V, Sidel R (2007) KKR to acquire First Data. https://www.wsj.com/articles/SB117549883685956662. Accessed 03 Aug 2018
  2. 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
  3. 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
  4. 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

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • B. Rajesh Kumar
    • 1
  1. 1.Institute of Management TechnologyDubaiUnited Arab Emirates

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