KKR To Buy First Data For $29 Billion; Shares Jump 25%

In the second biggest LBO of the year, Credit card processing company First Data has agreed to be taken private by Kohlberg Kravis Roberts for a reported $29 billion. The $34-per-share offer represents a 26% premium to the shares' $26.90 close on Friday. Shares are higher by $6.60, or 24.54%, to $33.50 in pre-market trading. First Data processes checks, as well as ATM, debit-card and credit-card transactions. Last year, the company reported $7.08 billion in revenue and net income of $1.51 billion. Growth is slowing, however, as it becomes harder to convince card-laden Americans that they need another one. Banks are also increasingly handling some of their own card processing operations. First Data recently spun off Western Union, its fastest-growing unit, and announced in February that it will streamline its business by exiting the official-check and money-order business. It is also expanding its network and data analysis capabilities through acquisitions -- four over the past two months -- and announced last week that it is purchasing a Polish card firm for $325 million as part of a drive into Central and Eastern Europe.

Sources: Press Release, Bloomberg, Wall Street Journal, Reuters, MarketWatch, New York Times
Commentary: First Data Corp. Exits the Check and Money Order Business • First Data Corp. Insecure Following Western Union Spinoff • First Data Corp. Undervalued?
Stocks/ETFs to watch: First Data Corp. (FDC). Competitors: Fidelity National Information Services Inc. (FIS), Fiserv Inc. (FISV), Total System Services, Inc. (TSS). ETFs: iShares Dow Jones U.S. Financial Services (IYG), Rydex S&P Equal Weight Financial Services (RYF)

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