At the Foolish Dealbook, we take a look at the mega buyout deals on the Street. So let's dig deep on KKR's $26 billion acquisition of First Data (NYSE:FDC), which was struck in early April. The company is the largest processor of credit and debit card payments in the U.S. and is even a Motley Fool Inside Value recommendation.

How the deal got done
December 2006: KKR's Henry Kravis met with James Robinson III, a director of First Data, and talked about the possibility of a buyout at $30-$32 per share.

January 17: First Data began discussions with KKR and said it would pursue a transaction if the price were $33.

March 6: KKR made a preliminary offer of $32.25. Fist Data also reached out to private equity firms "bidder A" and "bidder B." Because of confidentiality reasons, the names were not disclosed in the proxy.

First Data's advisor, Morgan Stanley (NYSE:MS), thought that there was a limited number of private equity firms that would have the capacity to pull off the deal. The firm even believed that a strategic buyer would not pay a price higher than KKR's.

March 21: KKR upped its bid to $33.50 while bidder A offered $30 and bidder B proposed $32.25 per share.

After much discussion, First Data agreed to work exclusively with KKR and negotiated a final price of $34 per share.

April: Morgan Stanley contacted 45 potential suitors but none submitted buyout proposals.

Valuation
 Evercore Partners performed a valuation on First Data and analyzed a variety of comparables like ADP, Global Payments (NYSE:GPN), Fiserv, MasterCard (NYSE:MA), Moneygram International, Total System Services, and Western Union (NYSE:WU).

Here are some of the results:

Calendar Year Financials

Comparable Company Multiple Range

Price to Estimated 2007 Earnings Per Share

19.0x-21.0x

Aggregate Value to Estimated 2007 EBITDA

9.5x-11.0x

Keep in mind that private equity investors focus heavily on EBITDA, because financing includes a lot of debt and there should be a comfortable amount of cash flow to handle it.

Applying First Data's EBITDA multiple, the stock price range would be $24-$28. So it does look like shareholders are getting a fair price.

The dealbook lowdown
According to a report in yesterday's Wall Street Journal, things are far from smooth on the First Data deal. It appears that KKR is having some difficulty rounding up the necessary financing on the terms it wants. Why? One issue is that investors have ponied up a lot of cash for KKR deals this year and may not want to have too much portfolio concentration. The other issue is that interest rates have edged up over the past month or so.

Yet with the stock price at about $32.50, the Street still thinks that KKR will get the First Data deal done. But it may be a little pricier than expected.

For further Foolishness:

First Data, Mastercard, and Western Union are Inside Value recommendations. Find out why with a free 30-day trial.

Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 2,149 out of 29,896 rated players on Motley Fool CAPS.