Fiserv (FISV - Get Report) said Wednesday that it has agreed to an all-stock deal to buy rival payments and financial technology provider First Data Corp. (FDC - Get Report) in a deal that values the group at $22 billion.
Fiserv will pay $22.74 for each First Data share, a near 30% premium to the group's closing price of $17.54 yesterday in New York. First Data shareholders will get 0.303 Fiserv shares under terms of the takeover, and will own 42.5% of the combined group once the deal closes in the second half of this year. Fiserv CEO Jeffery Yabuki will lead the new entity, while First Data CEO Frank Bisignano transitions to COO.
"I have long admired what Fiserv has achieved over the years, and I look forward to working with the talented associates of both companies as we set a higher standard of innovation and service in the industry," said Bisignano. "Our goal at First Data has always been to provide our clients with the most comprehensive suite of innovative, highly-differentiated solutions and services, and I am excited by the significant value that the combination with Fiserv creates for all stakeholders."
Atlanta-based First Data surged 21.1% to $21.24 on by the close of trading on Wednesday, while Fiserv shares fell 3.3% to $72.57.
Fiserv also released preliminary fourth quarter earning alongside the First Data takeover proposal, indicating it sees full-year GAAP revenues of $5.82 billion, including $1.55 billion for the final three months of the year.
Fourth quarter operating earnings were pegged at around 71 or 72 cents per share, down 43% from the same period last year, but largely in-line with the Street's consensus forecast. Full year earnings are likely to be stable at $2.87 to $288 per share, modestly ahead of estimates once tax benefits of around 28 cents per share are backed out.
First Data expects to report a 5% increase in fourth quarter segment revenue of $2.185 billion, and total full year sales of $9.5 billion.