First Data 2009 Annual Report Download - page 111

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
funds, private equity funds, real estate funds, venture capital funds, offshore fund vehicles, and funds of funds. If
an investment is within the scope of the update, the amendments permit investors to measure the fair value of the
investment using the investment’s net asset value per share (“NAV”) unless it is probable that the investment will
be sold at an amount other than NAV. The update also requires additional disclosures about the attributes of these
investments. This update applies to certain assets in the Company’s defined benefit pension plans and is effective
for the year-end measurement of plan assets on December 31, 2009. The Company adopted the new guidance in
the fourth quarter 2009 and it did not have a material impact on its financial position and results of operations.
In October 2009, the FASB revised its guidance on Revenue Recognition for Multiple-Deliverable Revenue
Arrangements. The amendments in this update will enable companies to separately account for multiple revenue-
generating activities (deliverables) that they perform for their customers. Existing U.S. GAAP requires a
company to use vendor-specific objective evidence (“VSOE”) or third party evidence of selling price to separate
deliverables in a multiple-deliverable arrangement. The update will allow the use of an estimated selling price if
neither VSOE nor third-party evidence is available. The update will require additional disclosures of information
about an entity’s multiple-deliverable arrangements. The requirements of the update will apply prospectively for
revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010,
although early adoption is permitted. The Company adopted the new guidance on January 1, 2010 and has no
arrangements for which this adoption will have a material impact on its financial position and results of
operations.
Note 2: Merger
On April 1, 2007, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”)
with New Omaha Holdings L.P., a Delaware limited partnership (“Parent”), and Omaha Acquisition Corporation,
a Delaware corporation and a subsidiary of Parent (“Sub”). Parent is controlled by affiliates of KKR. On
September 24, 2007, under the terms of the Merger Agreement, Sub merged with and into the Company (the
“merger”) with the Company continuing as the surviving corporation and a subsidiary of First Data Holdings,
Inc. (“Holdings”; formerly known as New Omaha Holdings Corporation), a Delaware corporation and a
subsidiary of Parent.
As of the effective time of the merger, each issued and outstanding share of common stock of the Company
was cancelled and converted into the right to receive $34.00 in cash, without interest (other than shares owned by
Parent, Sub or Holdings, which were cancelled and given no consideration). Additionally, vesting of FDC stock
options, restricted stock awards and restricted stock units was accelerated upon closing of the merger. As a result,
holders of stock options received cash equal to the intrinsic value of the awards based on a market price of
$34.00 per share while holders of restricted stock awards and restricted stock units received $34.00 per share in
cash, without interest. Vesting of Western Union options, restricted stock awards and restricted stock units held
by FDC employees was also accelerated upon closing of the merger.
The merger was financed by a combination of the following: borrowings under the Company’s senior
secured credit facilities, senior unsecured term loan facility agreement, senior subordinated term loan facility,
and the equity investment of Holdings. The purchase price was approximately $26.6 billion including $179.2
million in capitalized transaction costs and excluding assumed debt. The merger was funded primarily through a
$7.2 billion equity contribution from Holdings and $22.0 billion in debt financing discussed more fully in Note 9.
Purchase Price Allocation
The total purchase price was allocated to the Company’s net tangible and identifiable intangible assets based
on their estimated fair values as set forth below. A portion of the valuation of identifiable intangible assets was
allocated to the Company’s investments in unconsolidated alliances (reflected in the “Investment in affiliates”
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