Private equity firm Kohlberg Kravis Roberts (KKR) is to acquire First Data in a $29 billion buy-out.
First Data shareholders will receive $34 in cash per share, representing a premium of approximately 26% over First Data’s closing price of $26.90 on Friday.
The move to sell the firm comes seven months after First Data chairman and CEO Ric Duques spun off the company's Western Union money transfer business and three months after exiting the cheque and money order business, citing unacceptable returns. He says the deal with KKR presents "an exceptional opportunity to fulfill our commitment to maximise the value of First Data by delivering an immediate cash premium to our shareholders".
KKR Member Scott Nuttall says First Data is "at the forefront of the worldwide trend toward electronic payments".
He adds: "We believe that through continued investments in its technology, people and customer relationships, First Data will build on its history of innovation and industry leadership."
TowerGroup analyst Gareth Lodge says he expects KKR to divest geographically isolated entites in the First Data empire and re-invest the proceedings in growing the payment firm's international business.
Under the agreement, the First Data board has 50 days to seek out alternative third party investors who can better the KKR proposal.