Dubai Payments Firm Network International Plans London IPO
(Bloomberg) -- Middle Eastern payment processor Network International has announced plans to sell a 25 percent stake in London in the first big initial public offering in the U.K. this year.
The company will not raise any new capital from the listing, scheduled for about four weeks from now, and shareholders are expected to reduce their stakes on a pro-rata basis. Warburg Pincus and General Atlantic jointly own a 49 percent stake in Network International, while Dubai’s biggest bank, Emirates NBD PJSC, holds the remaining 51 percent.
Network International will be the first company of scale to test investor appetite in Europe’s lackluster IPO market, where concerns over Brexit and slowing growth in Germany and France have helped push volumes at the start of this year to the lowest level since the financial crisis, according to data compiled by Bloomberg. An IPO could value the company at about $3 billion, people familiar with the matter said in November.
"We are monitoring the IPO market closely with the whole Brexit debate, but it doesn’t affect us because our business is not reliant on London’s relationship with the European Union," said Chief Executive Officer Simon Mark Haslam.
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Network International is instead focusing on growth in the Middle East and Africa, which is the world’s most underpenetrated market when it comes to digital payments, Haslam said. "The region is ripe to undergo the shift from cash.”
The company expects to be eligible for inclusion in FTSE U.K. indexes, it said in a statement on Thursday. Rohinton Kalifa, who helped develop Worldpay into a global payments company, will take over as chairman from Abdulla Qassem.
Citigroup Inc., Emirates NBD Capital, JPMorgan Chase & Co., Morgan Stanley, Barclays Plc, Goldman Sachs Group Inc., Liberum Capital Ltd. and Evercore Partners International LLP are working with the firm on the listing.
The European technology sector has seen a flurry of deals over the past year, in part because investors expect fintech firms to benefit from regulatory initiatives to support the industry, including better risk management and more stringent monitoring of cryptocurrencies.
Middle Eastern firms have a track record of listing in London. Abu Dhabi’s NMC Health Plc has surged more than tenfold since listing in the U.K. seven years ago, according to data compiled by Bloomberg. Al Noor Hospitals Group Plc listed in London in 2013 before being taken over by Mediclinic International Plc. VPS Healthcare LLC hired Rothschild & Co. to advise on a potential London listing, people with knowledge of the matter said in May.
Warburg Pincus and General Atlantic acquired the stake in Network International from troubled private equity firm Abraaj Group and sovereign wealth fund Emirates Investment Authority in 2015. The Dubai-based company, created as a division of Emirates Bank in 1994, provides services to more than 65,000 merchants and 220 financial institutions, according to its website.
- Network International posted revenue of $298 million last year
- Group underlying Ebitda margin, excluding share of an associate, at 48.9 percent last year; underlying Ebitda $152 million
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