The largest processor of card payments is going private

First Data Corp. has entered into an agreement to be acquired for $29 billion by an affiliate of Kohlberg Kravis Roberts & Co, a leading private equity firm.

The agreement was unanimously approved by the First Data board of directors. Under the agreement, First Data shareholders will receive $34 in cash for each share of First Data common stock they hold, representing a premium of approximately 26% over First Data’s closing share price of $26.90 on March 30, 2007, and a premium of approximately 34% over the average closing share price during the previous 30 trading days.

“We are pleased to reach this agreement with one of the world’s largest and most successful private equity firms,” says First Data CEO Ric Duques. “We believe that current market conditions present an exceptional opportunity to fulfill our commitment to maximize the value of First Data by delivering an immediate cash premium to our shareholders.”

Since its initial public offering in 1992, First Data has grown from $1.2 billion in annual revenue to $10.6 billion prior to the spin-off of Western Union and $7.1 billion post spin-off. Citigroup, Credit Suisse, Deutsche Bank, HSBC, Lehman Brothers, Goldman Sachs and Merrill Lynch have committed to provide debt financing for the transaction subject to customary terms and conditions, and are acting as financial advisors to KKR. Simpson Thacher & Bartlett LLP is acting as legal advisor to KKR.

Morgan Stanley & Co. is serving as sole financial advisor to First Data and Evercore Group L.L.C. is serving as financial advisor to the Strategic Review Committee of the First Data board of directors. Sidley Austin LLP is acting as legal counsel to First Data. Sullivan & Cromwell LLP is acting as legal counsel to the company’s independent directors.

Completion of the transaction, which is subject to the approval of First Data shareholders, regulatory approvals and customary closing conditions, is expected by the end of the third quarter of 2007.