Eye on Wall Street: First Data Names IPO Underwriters; Worldpay in Play?

Payment processor First Data Corp. on Tuesday named a big cast of underwriters for its planned initial public offering of stock. Meanwhile, a German processor reportedly is joining private-equity firms in making a play for United Kingdom-based Worldpay Ltd., which is one of the world’s largest merchant acquirers and has a big U.S. operation.

First Data named 15 Wall Street and foreign banks as underwriters participating in the prospective IPO. The lead managers, according to an amended registration statement filed with the Securities and Exchange Commission, are Citigroup Inc., Morgan Stanley & Co., Bank of America Corp.’s BofA Merrill Lynch, and KKR Capital Markets LLC, an affiliate of First Data’s private-equity owner, Kohlberg Kravis Roberts & Co. One major bank not on the list is JPMorgan Chase & Co., the former employer of First Data chief executive Frank Bisignano and some other First Data brass.

This first amended filing still leaves out some key information, such as exactly how much First Data hopes to raise, when the IPO will occur, the price and number of shares to be sold, on which stock exchange the shares will trade, and its ticker symbol. The filing continues to state a $100 million maximum offering price, but that figure is merely a placeholder for calculating registration fees. A First Data spokesperson did not respond to a Digital Transactions News’ requests for comment.

According to the filing, however, First Data has not changed its originally stated plan for use of the IPO’s proceeds: paying down some of its $20.7 billion in long-term borrowings as of June 30, debt incurred from KKR’s $29 billion leveraged buyout of the company in 2007.

The plan calls for two tiers of common stock, with each Class A share having one vote and each Class B share having 10 votes. KKR and its affiliates will not hold any Class A shares but will have the majority of the voting power after the IPO through their control of the Class B shares, according to the filing. As an example, the filing says that if the Class B shares amounted to 15% of all the company’s common stock, the Class B holders would control 64% of the voting power. The filing foresees the Class B shares eventually converting to Class A, but doesn’t say when.

Meanwhile, Bloomberg News reported late Tuesday that Wirecard AG, based near Munich, has made a bid of about $9.4 billion for Worldpay. Wirecard was founded in 1999 and specializes in online and mobile payments, according to Bloomberg. Wirecard is known for trying new technology, such as developing a wearable wrist band with payments capabilities.

Worldpay, which like First Data is planning an IPO, also is the target of private-equity bidders, including a joint offer by Blackstone Group and Hellman & Friedman, according to the Bloomberg report, which cited unnamed sources.

Worldpay is owned by Advent International Group Corp. and Bain Capital, which acquired the company from Royal Bank of Scotland in 2010. The processor’s Atlanta-based U.S. unit last year processed 3.54 billion transactions worth $136 billion from 165,000 active merchant locations, according to Worldpay’s annual report.

—With additional reporting by John Stewart