First Data Corp could rake in as much as $3.7 billion after it launched its initial public offering. If successful, the IPO will be the biggest in US this year.
The payment processing firm said it was offering up to 5% of its stake to employees and clients. That includes millions of its customers that process credit and debit card transactions using the company’s hardware and network.
Employees may purchase as much as 4.25% of the offered shares through Morgan Stanley’s brokerage. Some 0.75% of the IPO shares are open to specific clients and individual investors. Clients and individual investors may buy the shares through brokerage Loyal3 Holdings Inc.
The Atlanta-based payment company plans to sell 160 million shares at a price range of $18-$20 for each share. If the IPO manages to sell maximum shares at a price of $20 for each share, the company will hit a market valuation of around $18 billion.
First Data facilitates the exchange of trillions of dollars in credit card, debit card, and other business transactions for its customers. The company debuts on the New York Stock Exchange under the symbol FDC. Sources close to the latest affairs of First Data indicate that the company will begin trading next week.
KKR & Co. acquired First Data in 2007 for $26 billion. KKR is not offering any shares in this IPO, but the private equity firm has an opportunity toward recouping its investment on a venture that has often seemed to not payoff.
First Data has had turbulent times in the wake of the financial crisis, with KKR reducing the company’s value at one point. In 2014, KKR injected more money into First Data, which has performed well lately. The firm registered its first three-month profit in seven years in the fourth quarter of 2014.
Chairman of the company Frank Bisignano wrote to investors, saying that opening up more First Data shares to employees would help keep their loyalty. Bisignano, who is also First Data’s chief executive, told clients that the company appreciated their business and that is why it invited them to participate in the IPO.