First Data Holdings, the direct parent company of First Data Corporation, has secured commitments to purchase approximately USD3.5 billion of its common equity in a private placement.
The net proceeds from the private placement will be used to strengthen the company's balance sheet through repaying portions of its debt, allowing the company to focus additional capital on accelerating its transformation to a solutions and innovation company that helps First Data clients grow their businesses.
The USD3.5 billion includes USD1.5 billion from existing investors and USD2.0 billion from new investors, including a diverse group of pension funds, mutual funds, asset managers and wealthy individuals.
KKR provided approximately USD1.2 billion, including USD500 million from its 2006 Fund and USD700 million from its balance sheet. Upon close of the transaction, KKR's balance sheet will have approximately USD1.0 billion invested in First Data's equity, through general partner and limited partner interests.
"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," says Frank Bisignano, chairman and chief executive of First Data. "The enthusiastic response to our strategic vision and the resulting USD3.5 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. The new investment will unlock USD375 million per year to help us accelerate our transformation.”
"We are pleased to be joined by several investors who saw, as we do, that Frank's team is able to successfully combine First Data's existing unique assets with cutting-edge technology that we believe will take the company to the next level in the months and years ahead," says Henry Kravis, co-chief executive officer and co-chairman of KKR and a member of First Data's board of directors. "Over the last year, the company has made great strides to solidify its role as a provider of solutions to its clients who span the globe."
