DENVER – Payments processor First Data Corp. yesterday said financing costs for last year’s $27 billion takeover by Kohlberg Kravis Roberts & Co. pushed it into the red to the tune of $160.6 million for the second quarter, compared to a profit of $228.9 million for the same period last year.
For the first six months of the year, First Data reported a $382.3 million loss, compared to a $404.1 million profit for the same period last year.
Revenues rose a strong 10% to $2.2 billion for the quarter. But it was not enough to account for a 10-fold increase in interest expense to $451.1 million for the second quarter, and a whopping $968.8 million for the first half of the year, from just $70.4 million for the same period last year. Revenues for the first six months rose 13% to $4.3 billion.
“Our focus on investment in product development is starting to pay off with significant customer wins in multiple segments,” said Michael Capellas, chairman and CEO of the payments giant. “Despite difficult economic conditions, we continued to grow revenue and improve profitability.”
First Data was taken private by KKR in one of the biggest deals of last year’s takeover boom. The reason the company continues to disclose its financial report to the public is because the takeover was financed with publicly traded debt.
The huge takeover was one of several that changed the landscape for credit union services, with venerable names such as Digital Insight, John H. Harland Co., Open Solutions, CheckFree and First Data being acquired or taken private.
