First Data to be Taken Over

DENVER – First Data Corp., the giant payments processor, announced this morning it has agreed to be acquired by leveraged buyout firm Kohlberg Kravis Roberts & Co. for $29 billion. First Data, which owns and operates the STAR payment network, serves 4.9 million businesses and 1,900 card issuers. First Data, which spun off its Western Union remittance operations just four months ago, was itself spun off from American Express in 1992. Terms of the deal call for the giant buyout firm to pay $34 a share for First Data, a 26% premium over Friday’s closing price of $26.90. KKR, which is in the process of completing the largest buyout ever, the $45 billion takeover of Texas energy giant TXU, was the focus of a best-selling book called ‘Barbarians at the Gate,’ chronicling its $31 billion acquisition of RJR Nabisco. The takeover of First Data follows other recent takeovers of major credit union outsourcers, including Open Solutions, Digital Insight, John H. Harland Co., PHH Corp. and Corillian Corp.