Citigroup and Morgan Stanley will lead the market debut of credit card processor First Data, in what will be one of the biggest initial public offerings of the year if it goes ahead. First Data, which is owned by private equity firm Kohlberg Kravis Roberts & Co, disclosed the lead underwriters in an updated registration statement filed with the Securities and Exchange Commission late on Tuesday.
Analysts at Renaissance Capital have estimated that First Data will raise at least $5 billion. The initial registration statement that was filed on July 20 did not list which banks would underwrite the issue. Normally, the underwriters are listed on the statement and investment banks view their ranking on the list as a badge of pride and an important calling card with soliciting future business. Usually, those ranked first earn the highest fees.
Absent on the list of 15 banks chosen by First Data, which includes Bank of America Merrill Lynch and Goldman Sachs, was J.P. Morgan Chase, a major player in underwriting equity market offerings. First Data Chief Executive Frank Bisignano was formerly a top J.P. Morgan banker, but relations between the two have been stormy since Bisignano left the bank for First Data in 2013, taking senior J.P. Morgan bankers with him. Kohlberg Kravis Roberts bought First Data in 2007 for $29 billion in one of the biggest leveraged buyouts before the financial crisis struck. Pricing terms for the First Data IPO have not yet been set. The timing and the valuation of the deal could be affected if volatility in equity markets persists into next month, when the IPO season reopens after the traditional summer lull.
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