Wednesday, March 24, 2010
The changes will take effect March 31, 2010, and were disclosed March 11, the same day First Data released its 2009 year-end financial results.
Forehand previously served as Chairman and CEO of Accenture, a management consulting, technology services and outsourcing company. He led Accenture through a global rebranding campaign and through its initial public offering (IPO). The company grew in revenue from $9.6 billion to $13.7 billion under Forehand's leadership.
KKR co-founder Henry Kravis thanked Capellas for his significant accomplishments while at First Data's helm. "First Data has shown exceptional resiliency and continues to grow and invest during this economic downturn," Kravis stated in a company press release. "I look forward to working with Michael in his new role as KKR Senior Adviser, and I am confident he will be a strong contributor to our technology team."
In a conference call convened about the appointments, Capellas said, "Both the board and I believe that we certainly have accomplished much of what we set out to do when we established our first three-year plan back in 2007 when the company went private." He added that the plan focused on increasing go-to-market capability, streamlining First Data's technology infrastructure, rebuilding the management team, improving customer service and globalizing the company.
First Data reported a rise in 2009 of its full-year, consolidated revenue of 6 percent, to $9.3 billion. However, the company's adjusted earnings before interest, taxes, depreciation and amortization were $2.1 billion, compared to $2.6 billion for 2008. First Data attributed the decline to the weaker economy, a stronger U.S. dollar and lower royalty revenues.
A reported full-year net loss attributable to First Data of $1.1 billion, including an after-tax interest expense of $1.1 billion, has not dampened the company's outlook. "In 2009, First Data improved its solid competitive position in the U.S. and around the globe," Capellas stated in a release about the earnings. "We remain focused on leveraging our strengths in distribution and product innovation as we emerge from a challenging 2009 economic environment.
"With the company on a really solid foundation and certainly positioned for growth with the economy starting to recover, I'm going to move on to my next logical phase."
Scott Nutall, who heads KKR's Global Capital and Asset Management Group, noted that Joe Forehand is a proven leader. "He guided Accenture through its IPO and a period of significant growth and success," Nutall said. "He has been an important part of KKR's efforts as a senior adviser and has more recently been directly involved with First Data as an adviser to management and a board member."
Tom Cannon, founder and CEO of Whitehall Capital Advisors LLC, told The Green Sheet that First Data is weighted heavily on card transaction volume, which has "dropped significantly in the last two years." He said Forehand's experience may be critical "if First Data is interested in changing its strategy to shift to a more services-oriented business."
Cannon added that Capellas' expertise seemed more related to hardware than service. He also said prepaid, debit and alternative payments will be the next wave in the payments space and that First Data is well-positioned in those areas.
When asked during the conference call whether the company has plans to go public while he is interim CEO, Forehand replied that First Data has no such immediate plans. He added that the performance of the business will dictate when the time is right for an IPO.
Cannon said he doesn't see First Data "spinning anything off short-term."
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
