Fiserv prices $9bn senior notes offering in connection with acquisition of First Data Corporation

Maria Nikolova

The offering is expected to close June 24, 2019, subject to customary closing conditions.

Provider of financial services technology solutions Fiserv Inc (NASDAQ:FISV) has announced that it has priced a public offering of $9 billion aggregate principal amount of senior notes, consisting of the following:

  • $2 billion of senior notes that mature in 2024;
  • $2 billion of senior notes that mature in 2026;
  • $3 billion of senior notes that mature in 2029;
  • $2 billion of senior notes that mature in 2049.

The offering is set to close June 24, 2019, subject to customary closing conditions.

The offering is being conducted in connection with the proposed acquisition of First Data Corporation, which is expected to be finalized in the second half of calendar year 2019. Fiserv says it plans to use the net proceeds from this and potential future offerings of securities, together with borrowings under its term loan facility and revolving credit facility, to refinance certain outstanding indebtedness of First Data, make cash payments in lieu of fractional shares as part of the merger consideration, and pay fees and expenses related to the merger, the refinancing, and the related transactions. Fiserv intends to use any remaining net proceeds for general corporate purposes.

The deal between Fiserv and First Data, which was first announced in January this year, is set to create one of the world’s leading payments and financial technology providers, and an enhanced value proposition for its clients.

Under the terms of the agreement, 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. This represents $22.74 based on closing prices as of January 15, and a premium of 29% to the five-day volume weighted average price as of that date.

Following the close of the transaction, Fiserv shareholders will own 57.5% of the combined company, and First Data shareholders will own 42.5%, on a fully diluted basis. The all-stock transaction is intended to be tax-free to First Data shareholders.

The combined entity will offer leading technology capabilities that 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 deep expertise in partnering with financial institutions, merchants and billers of all sizes, as well as software developers.

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