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KKR’s Acquisition of First Data

In: Wealth Creation in the World’s Largest Mergers and Acquisitions

Author

Listed:
  • B. Rajesh Kumar

    (Institute of Management Technology)

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.

Suggested Citation

  • B. Rajesh Kumar, 2019. "KKR’s Acquisition of First Data," Management for Professionals, in: Wealth Creation in the World’s Largest Mergers and Acquisitions, chapter 41, pages 335-338, Springer.
    • Handle: RePEc:spr:mgmchp:978-3-030-02363-8_41
    DOI: 10.1007/978-3-030-02363-8_41
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