KKR’s First Data Files for IPO Eight Years After Buyout
Summary
KKR is seeking to extract a profit from First Data, which struggled during the recession after the private equity firm acquired it in 2007 for $29.8 billion, including debt and fees. KKR financed the leveraged buyout with more than $20 billion of loans and bonds, and the Atlanta-based company cycled through a succession of chief executive officers as its debt load weighed on results. The private equity firm kicked in $1.2 billion, of which $700 million came from KKR’s balance sheet, a rare move that ratcheted up its exposure to First Data’s future. “Yes, the business had its challenges,” Bisignano wrote in a letter attached to the prospectus, citing the debt load, management changes and a restructuring plan based on selling assets. “But I knew that payments was a growth industry, that technology was the great enabler.” KKR’s co-founder Henry Kravis and executives Scott Nuttall and Tagar Olson represent the buyout firm on First Data’s board.
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