Back in late September, KKR closed one of the largest buyouts in history – the $29 billion transaction for First Data, which is a leading payments processing operator.
Even though the company is private, it is still publishing its financials and is having quarterly conference calls. So how are things going?
For the first nine months of 2007, revenues increased 15% to $5.9 billion and adjusted EBITDA was $1.8 billion (up 7%).
In fact, First Data's new CEO, Michael Capellas, also provided his go-to-market strategy – shedding some light on what happens in post-buyout environments.
First of all, he wants to find ways to increase organic growth. To this end, there will be more emphasis on bolstering the sales force – as well as finding ways to cross-sell offerings.
Next, the company wants to bring new product innovations to market (hey, it means more cross-selling, right?) Some of the areas include mobile ecommerce, analytics, and fraud detection.
Another big opportunity is the growth in emerging markets. Interestingly enough, Capellas is not looking for acquisitions to bulk things up on this front.
Finally, Capellas will try to cut lots of costs. Going into 2008, he thinks he can slash $200 million in annual costs.
And, this means layoffs – about 6% of the workforce. Yes, some things never change.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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