First Data prepares for multibillion dollar listing

First Data prepares for multibillion dollar listing

Payments processor First Data has filed for an IPO that could be worth billions, just eight years after the company went private in one of the biggest leveraged buy-outs ever seen.

Although the paperwork, filed with the Securities and Exchanges Commission on Monday, gives few details as to when the IPO will happen, it is estimated the action could raise somewhere between $25 and $40 billion.

The proceeds from the deal will be used to repay some of the $20 billion of debt that was used to finance the 2007 buy-out when First Data was acquired by private equity firm Kohlberg Kravis and Roberts (KKR) at the peak of the buy-out boom in a deal worth $26 billion.

However the company struggled in the aftermath as credit card transactions dropped following the financial crisis and debt in excess of $20 billion restricted the company's growth plans.

In 2014 KKR invested a further $1.2 billion of its own as part of a $3.5 billion equity injection and a new chief executive, Frank Bisignano, was appointed in 2013.

In a letter to prospective investors included in the filing, Mr Bisignano outlined the company's recent challenges of "continuous management change, a restructuring plan largely based on selling assets, $24.5 billion of debt and flat revenue growth the year before I joined" but added that the IPO will be part of a strategic transformation and an emphasis on enterprise services. "We have what so many innovators often lack - the ability to distribute to a large client base," wrote Mr Bisignano.

As one of the largest processors in the payments industry, US-based First Data works with over six million merchants and, in 2014, handled more than 74 billion transactions globally, including 45% of US credit card transactions.

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