Fiserv to acquire First Data

 In News

Fiserv and First Data Corp. have announced that their boards of directors have unanimously approved a definitive merger agreement under which Fiserv will acquire First Data in an all-stock transaction.

According to a press release, First Data shareholders will receive a fixed exchange ratio of 0.303 Fiserv shares for each share of First Data common stock they own, for an equity value of $22 billion. The all-stock transaction is intended to be tax-free to First Data shareholders.

The companies called the deal a “highly complementary combination” that will enable a range of payments and financial services, including account processing and digital banking solutions; card issuer processing and network services; e-commerce; integrated payments; and the Clover cloud-based point-of-sale solution.

The combined company will offer comprehensive distribution channels and have expertise in partnering with financial institutions, merchants and billers of all sizes, as well as software developers, the release said.

The transaction is expected to generate at least $500 million of revenue synergies over a 5-year period, and is expected to be accretive to adjusted EPS by more than 20 percent in the first full year following close.

Upon closing, Jeffery Yabuki, current Fiserv president and CEO, will serve as CEO and chairman of the board of directors of the combined company.

Frank Bisignano, current chairman and CEO of First Data, will assume the role of president and chief operating officer, and will serve as director of the board of the combined company. The combined entity will be known as Fiserv.

The transaction is expected to close during the second half of 2019, subject to customary closing conditions and regulatory approvals.

J.P. Morgan Securities LLC is serving as financial advisor to Fiserv and has provided committed financing. Sullivan & Cromwell LLP is serving as legal advisor to Fiserv.

BofA Merrill Lynch is serving as financial advisor to First Data. Simpson Thacher & Bartlett LLP is serving as legal advisor to First Data. Evercore is serving as financial advisor to the independent directors of the board of First Data, and Latham & Watkins LLP is serving as legal advisor to the independent directors of the board of First Data.

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