First Data Nets $3.5 Billion for Debt Relief
June 23, 2014
Atlanta-based payments processing giant First Data announced a private placement worth $3.5 billion. The proceeds of the deal, which was led by KKR & Co., the private equity firm that acquired First Data in a $29 billion leveraged buyout in 2007, will be used to ease the company’s debt burden, according to a press release. KKR will invest an additional $1.2 billion in the processor and $2 billion from outside investors that include, according to reports, “unnamed pension funds, mutual funds, asset managers and wealthy individuals.”
First Data CEO Frank Bisignano said the investment would free up $375 million annually that had been earmarked to debt service resulting from the LBO.
“We have taken full advantage of the last 12 months to strengthen our company through a total focus on serving our clients and bringing them new innovations that help them grow their business,” Bisignano said in a press release. “The enthusiastic response to our strategic vision and the resulting $3.5 billion investment in the future of First Data, demonstrates confidence in the strategy on which we’ve embarked and validates the outstanding work of our 23,000 employee-shareholders.