Among the biggest winners in First Data’s public stock offering could be the company’s employees, about 5,000 of whom work in Omaha.

The company’s workers around the world already hold tens of millions of shares of First Data Corp. as the stock begins trading on the New York Stock Exchange today.

Each employee could end up holding about $49,400, on average, though that number certainly is skewed by the big holdings of the company’s executives, managers and directors. The employees had been granted stock in lieu of company contributions to their retirement plans.

Securities lawyer Gregory Sichenzia, founder and partner of New York-based Sichenzia Ross Friedman Ference, said First Data’s initial public offering is a “showcase deal” that is sure to attract a lot of attention on Wall Street.

“It’s an American icon, this company,” he told The World-Herald. It’s been around forever and probably will be around forever.”

First Data was founded in Omaha in 1971 as one of the country’s first processors of credit card payments. It was headquartered in the city until 1992, when then-owner American Express took the company public in its first IPO and moved the headquarters to Hackensack, New Jersey.

It’s now based in Atlanta, but many of the company’s operations remain in Omaha, including a data center, its card-personalization plant and sprawling print mail facilities.

Even though the stock debut is expected to raise a good deal of money, shares of First Data are expected to trade on the New York Stock Exchange at $16 per share, below the $18 to $20 range officials estimated in federal filings earlier this month.

Proceeds of about $2.56 billion will be used to pay down debt, the company stated in preliminary filings.

The company’s July filing for its initial public offering indicated that employees held about 71 million shares of so-called restricted stock units. That filing indicates those restrictions are to lift 180 days following the IPO. In other words, workers who hold shares will be able to sell them on the open stock market.

Based on those figures and the pricing information released Wednesday, the company’s employees held a collective $1.1 billion stake in First Data, or an average of $49,391 a piece.

That average is skewed by the holdings of First Data executives and directors, who hold about 10.4 million shares, or $166.4 million. Subtracting the holdings of executives and directors, First Data employees’ average stake falls to about $42,000.

First Data Chairman and Chief Executive Frank Bisignano is far and away the leading individual stakeholder, with almost 5.5 million shares of First Data stock. Based on expected pricing, Bisignano’s shares would be worth $88 million.

Vice Chairman Joseph Plumeri and director and former interim Chief Executive Joe Forehand, with about 1.3 million shares and about 1.1 million shares, respectively, are the only other company insiders with more than 1 million shares.

The reason nearly all First Data employees have shares in the company is that the company offered shares in place of contributions to retirement plans, which were suspended in January of last year to save money.

The decision at the time was expected to save the company $60 million last year and $100 million by 2017.

Also read: First Data’s employees now face stock decision

Fewer than 300 employees owned stock in First Data when Bisignano joined the company from J.P. Morgan Chase in April 2013.

At that time, the company had 24,000 employees and “was unsure of its direction,” Bisignano wrote in a letter including the IPO filing. “First Data had been both an underinvested and an undermanaged business,” he said.

The company plans to sell 160 million shares, with an additional 24 million shares set aside for the group of investment banks underwriting the deal. First Data will use the proceeds to pay down debt.

The size of the deal alone, which could raise as much as $2.9 billion, makes it appealing to a larger base of potential investors, said Will Preston, a research analyst with Greenwich, Connecticut-based Renaissance Capital.

Preston’s firm manages IPO-focused exchange-traded funds and its research has found only a 2 percent return for U.S. companies that have gone public in the last 90 days.

After the buzz of the IPO wears off — such companies typically see a first-day bump in share price due to the general excitement of a new offering — Preston said new public companies’ stocks have lost 9 percent collectively over the last 90 days.

“Performance like that is bad, and when that’s the case, investors become more sensitive,” he said.

There is a silver lining, however: The sheer size of First Data should eventually land it into the S&P 500 index, according to Preston.

Being included in the stock market’s broadest index means the dozens of funds that track the market by using the S&P 500 could buy First Data shares as part of their portfolios.

Proceeds from the stock offering — by far the largest of 2015 — will be used to lift the company out of a canyon of debt that is the byproduct of its previous life under New York private equity firm Kohlberg Kravis Roberts.

KKR took First Data off the public exchange in 2007 with a debt-laden financing deal valued at about $26 billion. An additional infusion of $3.5 billion in mid-2014 included $1.2 billion of capital from KKR, making Omaha-born First Data its largest-ever equity investment.

Among other business, First Data processes nearly half of all card swipes on the planet, and from each transaction, it receives a sliver of revenue.

But the company under KKR ownership struggled to turn a profit thanks in part to interest payments tied to the copious debt attached to the 2007 buyout. The financial crisis and global recession that followed the change in ownership compounded matters as the ensuing hit to consumer confidence stymied spending.

Its global employment headcount fell to 23,000 at the most recent count from 29,000 in late 2007. In Omaha, where the organization was founded in 1971, employment was more steady, falling to about 5,000 today from about 5,300 in late 2007.

Rumblings of an IPO fired up earlier this year when the company reported a quarterly profit in the last quarter of 2014. That marked its first profitable quarter under KKR ownership.

That doesn’t mean First Data is out of the woods, however.

“They have massive debt and ridiculous rates,” said Sichenzia, the New York securities lawyer. “They need to pay some of that down and put more equity on the books.”

“This isn’t your typical growth story where they raise money and it goes to” building the business, he said.

Contact the writer: 402-444-1534, cole.epley@owh.com

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