A Milwaukee-area company will purchase First Data, the Omaha-born company that has employed around 5,000 people in the area.
Fiserv, a financial technology company, said Wednesday that it had signed a deal to buy First Data for $22 billion.
At least some of the First Data jobs in Omaha could be at risk as the combined company, which will operate under the Fiserv name, looks to prune duplicate functions.
It wasn’t clear in the companies’ Wednesday statement what the deal would mean for their workforces. A spokeswoman for First Data said she didn’t have an initial comment when contacted by The World-Herald. She didn’t return follow-up messages. Fiserv also didn’t return telephone calls or email messages.
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John Boyd, an expert when it comes to companies determining where to locate their workforces, said the First Data sale should ring alarm bells in Omaha.
“The acquisition puts Omaha at risk for all the customary risks you would expect,” he said — the redundancies and duplication of jobs that come with any tie-up of two companies.
The type of work that First Data does in Omaha is in large part labor-intensive and repetitive, he said. It involves things like data processing and stamping cards.
As technology evolves, particularly as artificial intelligence takes hold, Boyd said a lot of those older-line jobs will most likely vanish. Automated systems in many jobs like these are taking humans out of the equation, he said.
In Omaha in recent years, First Data’s print mail facility at 72nd and Pacific Streets has generated more than 4 million pieces of mail daily. Its card factory in north-central Omaha has produced up to 100 million cards in a given year.
For these types of jobs at First Data in Omaha, Boyd said, “I would expect many of them just to disappear into the atmosphere.” Boyd, who runs the Boyd Co. site-selection firm of Princeton, New Jersey, has worked with major companies around the world, including in Omaha.
In the wake of the First Data deal, there is a risk that some jobs could be lost, said Anthony Hendrickson, dean of the Heider College of Business at Creighton University. But there’s also an opportunity: The companies said they would invest $500 million over the next five years in expanding certain parts of the business. Some of that investment could come to Omaha, he said.
“One would have to really be inside the tent” of executives to know what’s in their minds at this point, he said.
First Data and Fiserv said in their Wednesday statement that they intended to see “cost savings” as a result of the deal.
From a presentation detailing why the deal would be good for shareholders, the companies said: “Majority of savings (will come) from duplicative overhead, streamlining operations, enhanced operational efficiency and process improvements.”
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From First Data's founding in 1971 to its 2019 sale to Fiserv, check out a history of the company founded in Omaha.
1971: A group of Omaha businessmen acquires the assets of Mid-America Bankcard Association, a collective of Midwestern banks that was formed to process credit card payments, and First Data is founded. In its first year, it has 110 employees and $2 million in revenue.
1980: First Data grows to 2,000 employees and $50 million in revenue and is bought by American Express.
1992: American Express spins off First Data in an initial public offering; the company’s headquarters move from Omaha to the New York City area. In this World-Herald archive photo, First Data Resources programmers, software developers and telecommunications experts monitor some 40 million financial transactions a day from this center at 7305 Pacific St.
1996: The company relocates to new headquarters offices in Atlanta.
2007: New York private-equity firm KKR takes First Data back into the private sector in a leveraged buyout worth about $30 billion. At the time, it was the second-largest LBO ever made. This 2004 photo shows the company's Omaha building located in the Old Mill area.
2009: First Data HQ returns to Atlanta. A year later in Omaha, First Data opened a new Command Center, pictured, in the 7301 building on Pacific Street.
2013: Frank Bisignano becomes the fifth First Data CEO since 2007. Bisignano is seen here in 2015 visiting with production operator Rogelio Jimenez in the First Data Output Services building at 805 Crown Point Ave. in Omaha.
2014: KKR and a group of institutional investors sink $3.5 billion more into First Data in June, refinancing a significant portion of outstanding debt and setting up the company for a profitable fourth quarter — its first profitable quarter in 29 quarters of private-equity ownership. Seen here, operation technician David Badura of Omaha works in the First Data command center in in 2014.
Jeffery Yabuki, president and chief executive of Fiserv, said in the statement that his company looked forward to “welcoming First Data’s talented associates.”
First Data traces its roots to Omaha in 1971, when the First Data Resources sprang from the Mid-America Bankcard Association. First Data has in recent years employed around 5,000 people in the area. The company spokeswoman said Wednesday she didn’t have current figures for the most recent employee head count.
The company, which is now based in Atlanta, is among the Omaha area’s top 10 employers, according to data from the Greater Omaha Chamber of Commerce.
First Data Chairman and Chief Executive Frank Bisignano told The World-Herald in 2015 that First Data had “recommitted to Omaha” since his arrival in 2013. “I consider (Omaha) the heart and soul of the company, honestly,” he said at the time.
David Brown, the president and chief executive of the Greater Omaha Chamber, said the chamber would look to support the companies through the transition.
The chamber will “look forward to working with First Data’s leadership to build their future here,” he said. “There is no doubt that First Data’s impact on our region has been profound and appreciated, and we look forward to an even more compelling future.”
According to the companies’ Wednesday statement, First Data shareholders will receive about 0.30 shares of Fiserv for every share of First Data they own. That’s a premium of about 29 percent based on the recent trading of First Data’s stock.
“This is the best thing we could do for our shareholders in terms of building long-term value for them,” Bisignano said in Wednesday’s conference call.
The deal is expected to be complete in the second half of 2019, the companies said.
First Data’s stock jumped higher Wednesday in the wake of the deal, rising more than 21 percent from Tuesday’s closing prices to close at $21.24 a share on the New York Stock Exchange. Fiserv, on the other hand, closed down about 3.3 percent.
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Jan. 20, 1980: Computer terminal operators with phone headsets in Omaha check the credit score of customers all over the country.
Oct. 17, 1982: First Data founder P.E. "Bill" Esping, at the far end of the table, talks with key staff members. Clockwise, from left foreground, are Hansen, Masterson, Livingston, Kuhn, Hunter and Hoenshell.
March 9, 1991: First Data employees work at setting up computers in the company's new addition at 73rd and Pacific Streets. Eric Germany, left, and Rodney Murrell work among cables to be installed in the 155,000-square-foot building as John Keefe, left, and Dean Madsen discuss strategy in the background. The building, parking and landscaping will cost about $19 million.
Nov. 24, 1987: First Data building.
Jan. 19, 1989: FDR employee Lyle Snider handles computer tapes ... AT&T connected thousands of WATS lines to First Data in Omaha, which unveiled an "interactive" marketing system.
April 3, 1987: "The Wells Fargo Pay Wagon" doled out paychecks at First Data at 7301 Pacific Street. "Just to make it interesting," employees wearing cowboy hats and western-style clothes distributed checks at the payroll window as tapes of cowboy songs and country-western music played in the background. Personnel Manager Patrick Schneider said, "We just wanted a little humor and a few laughs."
April 24, 1987: Richard Bower, left, Irv Maas and Al Hunter of Neon Products Co. Inc. use a crane to install a new sign at First Data Resources' headquarters at 108th and Farnam Streets in the Old Mill office park. Robbi Weekly, manager of facilities planning for First Data, said the 20-foot sign was designed by TriAd Communications to match the tan, silver and blue exterior colors of the building, which First Data has occupied for about a year.
May 30, 1990: A construction crew uses the "tilt-up" method to lift concrete walls for First Data's credit-card manufacturing plant. Walls for the 105,000-square-foot plant are formed in a horizontal position, then lifted by crane and bolted in place.
June 20, 1990: Jim Jenkins, left, and Joe Ferrara operate an inserting machine in First Data's mail center. Employees' 'I care' attitude helped meet the new standards, Executive Vice President Aldo Tesi said.
Aug. 1, 1990: Debra Shaw, center, brought her résumé to Chris Clough, a secretary for First Data, after Morgan and others opened the employment office. "I have a lot of organizational and management skills," Shaw said.
Aug. 2, 1990: Ed Nafus, left, president of First Data, meets outside the Business and Technology Center at 24th and Lake Streets with Mayor Morgan, First Data employment director Caralee Davis and City Councilman Fred Conley.
Oct. 7, 1990: This First Data programming and systems team won a group award for quality performance ... wearing casual clothes during a clean-up day to prepare for Saturday's open house are, from left, Kelly Sampson, Pam Calderon, Larry Price, Theresa Erickson, Sue Roberts, Bill Stone and Rich Ferryman. Team members Earl Klinker, Scott Johnson Brian Nelson and David Rivera weren't available for the photo.
Nov. 21, 1990: A worker welds metal around the top-floor exterior windows of the First Data building at 73rd and Pacific Streets.
Nov. 1, 1990: Bankers from the United Kingdom could check on the time back home, thanks to an appropriate display of clcoks they found during a tour Wednesday of First Data's computer center. Kurt Strawhecker, second from left, is a First Data employee from Omaha who heads the 75-employee First Data Ltd. office at Brighton, England. Among the 10 visiting U.K. customers are Gerard Fox, left; Richard Whitehouse, next to Strawhecker; and Brian Wright. The group visited Norwest Corp.'s credit card office in Des Moines and will see other financial and credit card operations this week, then attend the Nebraska-Colorado football game Saturday.
Nov. 5, 1990: First Data's plastic card center at Interstate 680 and Irvington Road has 325 employees. "There is a lot of need for employees, and we thought this would allow us to tap the Blair market and the fringes of Omaha," said Rich Norman, senior vice president of operations.
March 2, 1991: Dennis MacKeprang, senior operator in First Data's new micrographics department, labels computer records for storage. The department moved into a new 20,000-square foot office recently. First Data said it is in the nation's largest microfiche operation, storing nearly 200 million microfiche files. The new office, at 7330 Pacific Street, cost more than $250,000. First Data puts reports and credit card customers onto microfiche. Up to 225 pieces of paper can be compressed onto a four-by-six-inch microfiche sheet. If not for microfiche, the company's paperwork from 1990 alone would fill a four-story building the size of a football field, the company said.
May 27, 1992: Mark Trimble feeds credit card bills into a new mail sorting machine, where they will be collected down the line by fellow workers. First Data spent $2.3 million to expand its mail service center.
May 27, 1992: Brenda Campagna, left, Mark Trimble and Karious Greer use new equipment at First Data to group credit-card bills according to zip code before mailing. First Data spent $2.3 million to expand its mail service center.
Dec. 23, 1995: Stevie Smith, left, and Kelli Volcek, both mail service operators at the time, were among the First Data workers who developed ideas and encouraged participation in a paper recycling effort. Behind them is some art sent in by school children.
May 17, 1996: First Data headquarters building in Atlanta.