First Data IPO could top the charts

3. HD Supply, 2013 -- $1.1B

4. Gulfstream, 1996 -- $1.0B

5. Travelport, 2014 -- $480M

6. Intercontinental Exchange, 2005 -- $478M

First Data chief executive Frank Bisignano got one of the biggest pay packages in Georgia corporate history soon after he was hired — $76.4 million in 2013.

Now the Atlanta company is attempting to notch another eye-popping superlative by pulling off a public stock offering that at least one expert thinks could rival UPS’s 1999 IPO as the biggest ever by a Georgia company.

“It could be the largest IPO of the year,” said Kathleen Smith, a principal at Greenwich, Conn.-based Renaissance Capital, which manages a fund of IPO stocks.

Smith expects the credit card payment processor to raise roughly $5 billion from investors sometime after Labor Day.

First Data filed notice of its IPO plan earlier this month, eight years after the company was taken private in a debt-fueled buyout by majority owner Kohlberg Kravis Roberts, a Wall Street equity firm known better as KKR.

Based in an office tower off Ga. 400, First Data is the world’s largest company that does the nitty gritty processing behind credit card transactions. It handles about 38 percent of the U.S.’s $4.5 trillion annual card purchases and 10 percent of global volume, according to Nilson Report.

It is one of the largest players in Georgia’s stable of about 100 financial technology companies, according to the American Transaction Processors Coalition, a trade group. They include firms such as Duluth-based NCR Corp. and Columbus’ Total System Services, that either process payments, build machines to handle them or design security systems to protect them.

First Data’s filing with the Securities and Exchange Commission shows that the stock sale could eventually produce a windfall worth hundreds of millions of dollars to the company’s 23,000 employees. Last year, the company expanded its management stock plan to almost all employees, awarding a total of 31 million shares of the company’s stock ahead of the planned IPO.

Typically there are conditions on how soon employees can sell stock after an IPO, but if the offering is a success and the company prospers afterward, the payoff can be substantial.

Bisignano, whose pay was disclosed in the filing, is potentially a big winner. He has received First Data shares and stock options — or rights to buy shares at a certain price in the future — valued at more than $77 million. He got most of it shortly after being hired in 2013 from JPMorgan Chase & Co., where he was co-chief operating officer. The value of his shares and options could soar if the IPO succeeds.

The SEC filing shows his total 2013 compensation of $76.4 million was mostly in stock-based pay. His pay package in 2014 was $9.3 million.

Tepid market

First Data could hit an IPO market that has been tepid despite the long-running bull stock market. Firms have floated about $22.5 billion worth of new stocks so far this year, about half of last year’s pace, according to Dealogic, a New York market research firm.

This year’s IPO volume also is well below its peaks during the dot-com boom in 1999 and 2000. There were 21 IPOs in Georgia in 1996, the peak year. Last year saw four.

Still, the IPO market has been “OK,” said Smith, and it could get a boost if the U.S. economy continues to improve.

Even with the slower pace of IPOs, “returns are positive for investors,” she said. “That is important because those returns are the engine that drives interest.”

If First Data is successful with an IPO in the $5 billion range, it would rival some of Wall Street’s biggest stock sales, although it would fall well short of last year’s record $25 billion raised by Chinese e-commerce company Alibaba Group.

UPS raised about $5.5 billion in its IPO, which dwarfs Georgia’s second-biggest, the $1.5 billion debut in 2000 of Mirant Corp., which later filed bankruptcy and was acquired.

First Data didn’t disclose how much stock it plans to sell in its filing to the U.S. Securities and Exchange Commission. The company, as is often the case with pending IPOs, declined to discuss the planned offering.

But the SEC filing, called a prospectus, shines a light on First Data’s fortunes of late.

The stock sale would allow First Data to pay down a chunk of its massive $21 billion debt, a legacy of the company’s heavy borrowing to finance KKR’s $29 billion deal to buy the company in 2007.

Paying down debt

First Data has said it plans to use the stock sale proceeds to pay off part its borrowings. The company has lost more than $9 billion since the buy-out, largely due to high interest costs on its debt. Meanwhile, it has been upgrading technology and adding new services such as mobile payments to boost revenues.

First Data, which continued to disclose financial results after the buyout, reported its first quarterly profit this year since the KKR deal.

The stock offering also could eventually provide KKR an exit from one of its most challenging investments, made just before the 2008 financial crisis. A KKR investment fund owns about 74 percent of First Data shares.

Under Bisignano, the company’s fifth CEO in eight years, First Data awarded company shares to almost all employees in 2013. It was part of efforts “to have everyone aligned around a clear mission and purpose,” Bisignano said in a letter included in the prospectus.

Employees are restricted from selling the shares for up to three years — unless First Data completes a “qualifying public offering” that nets at least $400 million for its owners, according to the filing.

First Data said such an event would unlock $326 million worth of stock-related pay to its executives and other employees.

First Data’s other top four executives received $17.7 million worth of stock-related pay since 2013, according to the filing.