First Data to Raise Up to $3.2B in IPO

First Data wants to raise as much as $3.2 billion in what will likely be the biggest US initial public offering of 2015.

First Data, based in Atlanta said Thursday it is expecting that its IPO to have a price of $18 to $20 per share of class A stock, which would value it at $17.57 billion at the upper side of the range.

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The net proceeds from the IPO will be allocated to redeeming the $510 million aggregated principal amount of its 11.25 percent senior unsecured notes due 2021.

The company was taken private in 2007 by KKR & Co LP for about $29 billion in one of the biggest leveraged buyouts before the financial crisis.

“After cycling through a succession of chief executive officers, KKR recruited Frank Bisignano in 2013 from JPMorgan Chase to run First Data”, Bloomberg wrote.

First Data processes payments for banks and merchants and offers other services and products including systems for accepting credit cards and preventing fraud. Last summer, the firm invested another $1.2 billion – leading an investment round worth $3.5 billion in total.

The third quarter was not kind to initial public offerings.

The timing of the IPO may be driven by the upcoming rise in interest rates that creates a sense of urgency for First Data to deliver before its cost of borrowing goes up even more, Luria says. The market was “hurt by the broad market sell-off and specific sector conditions, including a near absence of tech and energy issuance”, Renaissance Capital said.

Several companies that debuted in 2015 have been trading below their IPO price, discouraged by weeks of market declines sparked by tumbling Chinese stocks.