U.S. payment processor First Data, an affiliate of Kohlberg Kravis Roberts, is going public this year, according to a filing with the Securities and Exchange Commission on Monday.
The company says that it is looking to raise $100 million in its offering, but that will no doubt change going forward.
First Data runs a debit-card network and processes bank-card transactions for banks and merchants. It offers three business lines.
The first is its Global Business Solutions (GBS), which provides retail point-of-sale merchant acquiring and eCommerce services as well as mobile payment services, webstore-in-a-box solutions, and its cloud-based Clover point-of-sale operating system, which includes a marketplace for proprietary and third-party business apps.
First Data’s Global Financial Solutions (GFS) provides credit solutions for bank and non-bank issuers. These include credit and retail private-label card processing, as well as licensed financial software systems.
Finally, its Network & Security Solutions provide electronic funds transfer network solutions, value network solutions and security and fraud solutions.
First Data serves clients in 118 countries, reaching approximately 6 million business locations and over 4,000 financial institutions.
Last year, the company processed 74 billion transactions globally, or over 2,300 per second, and processed 28% of the world’s eCommerce volume. In its largest market, the United States, we acquired $1.7 trillion of payment volume, accounting for nearly 10% of U.S. GDP last year.
First Data saw $11.2 billion in 2014 revenue, up from $10.8 billion in 2013 and $10.6 billion in 2-2012. It is also seeing declining losses, seeing a net loss of $265 million in 2014, down from $692 million the year before. In the first three months of 2015, First Data has seen $2.7 billion in revenue, on a loss of $63 million.
Its biggest operating expense it listed as “Reimbursable debit network fees, postage and other,” which are personal identification number based debit (PIN-debit) network fees paid to merchants. This cost the company $3.6 billion in 2014. The other big money drainer is listed as “cost of services,” which took $2.6 billion last year.
This is actually going to be the second go-around for First Data on the public market. Founded in 1971, before being bought in 1980 by American Express, First Data spun off in 1992, and had its IPO, but was taken off the public when it was purchased by KKR in 2007.
The U.S. IPO market started out slow this year. With 34 IPOs raising $5.4 billion, the first quarter of 2015 turned out to be the least active quarter by IPO count since the first quarter of 2013, and the smallest by proceeds raised since the third quarter of 2011. To compare: the first quarter of 2014 saw 64 deals, and $10.6 billion raised. The only major tech IPO of the first quarter was cloud storage company Box.
The second quarter of the year was much stronger, going up 83 percent in volume and 111 percent in proceeds raised, compared to the first quarter of 2015, according to PwC. There were 75 IPOs completed in the second quarter of 2015 which raised more than $13 billion.
(Image source: behance.net)
