KKR completes acquisition of First Data

Source: Exec Digital UK

Date :25/09/2007 09:27:51

The private equity company Kohlberg Kravis Roberts (KKR) has completed its $26 billion (£13bn) acquisition of the credit card payment processor First Data Corp.

The deal is the second biggest private equity buyout, behind the $45 billion paid for the US utility firm TXU.

Following the market’s close on Monday, the company stopped trading on the New York Stock Exchange and will become private.

Credit Crunch

The finance for the leverage buyout came under pressure earlier this month, as banks were hit by a credit crunch from which most of the money was borrowed.

As many banks have found themselves holding debt of questionable value backed by US mortgages, they have been reluctant to take on any more debt.

This has made it difficult for banks to spread around the huge cost of such big deals, leading to limited new private equity deals being made.

Appointments

With the transaction completed, former CEO of MCI and president of Hewlett-Packard Company Michael Capellas becomes First Data's new chairman and CEO, replacing Ric Duques.

First Data also announced several new management appointments.

The company said all of its operations in the United States will be led by Edward Labry and will combine its commercial services and financial institution services segments.

First Data will combine its commercial services and financial institution services segments as its international division continues to be organized regionally.

September 25 2007

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