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Fiserv To Acquire First Data In All-stock Deal Valued At $22 Bln = Quick Facts

Fiserv Inc. (FISV), a provider of financial services technologies, has agreed to acquire First Data Corp. (FDC), a provider of electronic commerce solutions in an all-stock transaction valued at $22 billion, the two companies said Wednesday.

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, 2019.

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

Fiserv noted that the combination will offer 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.

Upon closing, Jeffery Yabuki, current Fiserv President and Chief Executive Officer, will serve as CEO and Chairman of the board of directors of the combined company.

Frank Bisignano, current Chairman and CEO of First Data, will assume the role of President and Chief Operating Officer, and also serve as director of the board of the combined company. The combined entity will be known as Fiserv.

New Omaha Holdings L.P., an affiliate of Kohlberg Kravis Roberts & Co. L.P., which controls about 39 percent of the outstanding First Data common stock and 86 percent of the voting rights of First Data, has entered into a voting agreement in support of the transaction. Upon closing, New Omaha Holdings will own approximately 16 percent of the outstanding common stock of the combined company.

The transaction, which requires the approval of shareholders of both companies, is expected to close during the second half of 2019. The transaction is not subject to any financing conditions.

For the fourth quarter, Fiserv expects to report revenue of $1.55 billion, reported earnings per share from continuing operations of $0.71 to $0.72, and adjusted earnings per share of $0.84 to $0.85.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.87 per share on revenues of $1.55 billion.

For fiscal 2018, the company now expects to report revenue of $5.82 billion, reported earnings per share from continuing operations of $2.87 to $2.88, and adjusted earnings per share of $3.10 to $3.11. Earlier, the company projected adjusted earnings to be in a range of $3.10 to $3.15 per share.

The Street expects the company to earn $3.13 per share for the year on revenues of $5.82 billion.

The company completed a two-for-one stock split in the first quarter of 2018. Accordingly, all share data and per share amounts are presented on a split-adjusted basis.

For fiscal 2019, Fiserv expects internal revenue growth in a range of 4.5 to 5 percent and adjusted earnings per share of $3.39 to $3.52, which represents growth of 10 to 14 percent over the expected 2018 range, as adjusted for the Lending Transaction.

The company's outlook for 2019 does not include any impact related to the transaction with First Data Corp.

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