Many First Data Corp. employees may feel like Christmas came early this year with the Atlanta company’s launch of an initial public offering worth up to $3.7 billion.
Last year, First Data expanded its management stock plan to almost all of its 23,000 employees, granting about 31 million shares under the plan.
Those shares could eventually be worth up to $620 million — or about $27,000 each — if First Data completes its plan to sell shares for $18 to $20 each in coming weeks.
Typically employees are restricted from selling their stock soon after an IPO, but the eventual payoff can be substantial if the offering goes well and the company prospers.
First Data, a payments processor, first announced its IPO plan last summer. Last week it set the target price range and said it expects to sell up to 184 million shares, raising $2.9 billion to $3.7 billion. That would make it the second-largest IPO by a Georgia-based company, behind UPS’s $5.5 billion offering in the late 1990s.
A date for the offering still hasn’t been set.
Some industry experts had initially expected First Data’s offering to be in the $5 billion range. But recent market turmoil has whittled the market value of many companies.
First Data said it plans to use about $2.5 billion of the IPO proceeds to pay off debt. The high-cost debt — with interest rates up to 12.625 percent — is a legacy of private equity firm Kohlberg Kravis Roberts’ debt-backed $29 billion buyout of First Data in 2007.
A KKR fund owns 74 percent of First Data’s shares. None of those shares are being offered in the IPO, but the deal still could eventually open an exit for KKR from its troubled buyout, which was inked shortly before the 2008 stock market crash and Great Recession.
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