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Payments General

Fiserv acquires First Data for USD 22 bln

Thursday 17 January 2019 | 12:05 PM CET

UK-based fintech Fiserv will acquire First Data in an all-stock transaction of USD 22 billion.

With the combined power, Fiserv will be able to offer a range of payments and financial services, including account processing and digital banking solutions; card issuer processing and network services; ecommerce;

As an example of how they will link up, Fiserv says First Data’s digital merchant account enrollment capabilities can be integrated into its digital banking solutions.
The new entity expects to invest an incremental USD 500 million over five years. Fiserv reckons growth will come from areas such as bank merchant services and Clover, credit processing, and additional biller services.

The programme, when up and running, will focus on a series of new and existing technologies, including merchant solutions, digital enablement, risk management, and data-focused solutions.

The new company expects to generate free cash flow exceeding USD 4 billion in the third year following close, and generate USD 900 million of run-rate cost savings, “driven primarily by the elimination of duplicative corporate structures”.

Fiserv intends to refinance the USD 17 billion of debt that First Data is expected to have at the time of closing, and has entered into a committed bridge financing arrangement in connection with the transaction.

The transaction, to close during the second half of 2019, is subject to customary closing conditions and regulatory approvals, including the approval of shareholders of both companies. The transaction is not subject to any financing conditions.

First Data is an electronic commerce and payment processing company, which makes payment transactions secure and fast for merchants, financial institutions and their customers.

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