For Michael Capellas, one of the country’s marquee corporate executives, taking the helm at First Data Corp. later this year will represent a natural progression in his career.
“I look at the waves of advancement. You catch certain waves,” said Capellas, who was named Tuesday by private-equity firm Kohlberg Kravis Roberts & Co. to replace retiring First Data chairman and chief executive Henry “Ric” Duques.
One of the next big waves Capellas sees coming is e-commerce via devices tapped into communications networks – a revolution that would allow people to do things like use a cellphone to buy a drink out of a vending machine.
“At the end of the day, you make the transaction on the Web,” Capellas said.
Greenwood Village-based First Data, a global leader in credit- and debit-card transaction processing, is well-positioned to lead that wave, he said.
Capellas helped popularize personal computers during the 1990s while at Compaq Computer Corp. High-speed data networks were his focus earlier this decade when he cleaned up the troubled WorldCom and folded it into MCI Inc.
In April, an affiliate of KKR made a $27 billion offer to take First Data, one of Colorado’s largest public companies, private.
But First Data shares have continued to trade below KKR’s offer of $34 per share, reflecting concerns that high-yield-bond investors may not fund the deal in a market heavy with large leveraged buyouts.
Capellas’ appointment could give KKR the push it needs to line up its financing for First Data, said Jerry Paul, a hedge-fund manager at Quixote Capital Management, which specializes in merger arbitrage.
“This is a positive step by KKR. It brings real credibility in here,” said Paul, whose firm holds First Data shares and options.
Turmoil in the subprime-mortgage market, however, continues to reduce the appetite for corporate high-yield debt issues.
That could push the First Data buyout, set for the end of the third quarter, into the fourth quarter, Paul predicted.
Any management change won’t occur until KKR completes its purchase. Capellas said he will work with the team arranging financing for the buyout and talk to potential bond investors if need be.
Although Capellas will be able to remake First Data away from the glare of public markets, he will still have to compete and produce returns for investors.
But for once, he will be on the other side of a buyout.
Capellas oversaw the sale of Compaq to Hewlett-Packard and of WorldCom to MCI, followed by the sale of MCI to Verizon.
Most recently, he has advised Silver Lake Partners, an investment firm, on technology concepts and potential investments.
Capellas, 52, said he wanted to eventually return to corporate management, one reason he didn’t take a partnership interest at Silver Lake, which has ties to KKR.
“I have not thought of retirement,” he said. “I have no less drive than I ever have. There is no part of me that is ready to slow down.”
Capellas maintains a summer home in South Carolina and a residence in Houston. He and his wife, Marie, sold a home in Washington, D.C.
Although he said he has not yet decided on a move to Denver, Capellas did add: “I live where I work.”
“Under Michael’s leadership, I am certain that the company will find more innovative ways to grow First Data’s powerful competitive position in the electronic payment and merchant markets, as well as its rapidly expanding international business,” Duques said in a statement.
First Data stock closed Tuesday at $32.70.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
Michael D. Capellas
Born: Aug. 19, 1954
College: Kent State University, 1976
Background: Senior adviser, Silver Lake Partners, 2006; acting president and chief executive, Serena Software Inc., 2006-07; president, CEO, MCI Inc., Ashburn, Va., 2004-06; chairman, CEO, WorldCom Inc., 2002-04; president, Hewlett-Packard Co., 2002; chairman, president, CEO, Compaq Computer Corp., Houston, 1999-2002; acting chief operating officer, Compaq Computer Corp., Houston, 1999; chief information officer, Compaq Computer Corp., Houston, 1998-99; senior vice president, general manager for global energy business, Oracle Corp., 1997-98; director of supply-chain management, SAP Am., 1996-97; founder, managing partner, Benchmarking Partners, Cambridge, Mass., 1996; corporate director for infomation systems, controller and treasurer of Asia Pacific operations, Schlumberger Ltd., 1981-96; Republic Steel Corp., 1976-81
Addictions: Tech gadgets and music (has 10,000 songs on his laptop)
Hobby: Golf (15 handicap)
Now you know: Blind in his left eye
Favorite sports teams: Houston Astros, Cleveland Indians
Family: Wife, Marie; two children
Sources: Who’s Who, Standard & Poor’s, Nexis, USA Today
BARBARA HUDSON, DENVER POST RESEARCH LIBRARY
