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Worldpay has announced plans to raise as much as £2.5bn in the UK’s biggest initial public offering of the past two years.
The payments processor priced its listing slightly below the midpoint of its initial range,
Worldpay deal on a knife edge
valuing the company at £6.3bn, including £1.5bn of net debt.
People close to the company, which is chaired by Barclays deputy chairman Sir Mike Rake, said it rejected the French group’s offer because of the risk it would struggle to raise financing in equity markets.
Worldpay’s private equity owners also hope to benefit from future increases in its share price as they sell down their remaining majority stake over time.
The IPO will be comprised of slightly more than 1bn shares — if an overallotment option is exercised — priced at 240p per share. The shares rose 5% to 252p in early conditional trading on Tuesday.
Worldpay’s US private equity owners — Advent International and Bain Capital — will raise as much as £1.4bn of proceeds from the IPO.
Advent and Bain are expected to make about four times their investment in the company, which they acquired from Royal Bank of Scotland in 2010 and then invested about £1bn to improve its technology.
The company, which handles about 31m transactions a day via cards, mobile devices and the internet, will raise about £950m from selling shares in the listing to pay down its debt.
The listing values Worldpay at more than 16 times last year’s underlying earnings, before interest, taxation, depreciation and amortisation of £375m, which rose more than 8% from 2013.
Philip Jansen, chief executive, called the IPO a “milestone” that will allow the company to continue growing.
“We have already invested over £1bn in our technology, people and capabilities, helping us to become an advanced and sophisticated technology-led organisation with great potential,” he said.
The share offering was more than seven times covered by demand from investors at the listing price.
Bankers working on the IPO said it had overcome both recent volatility in stock markets and competition for investors’ attention with its US rival First Data, which is also preparing for listing in New York.
Worldpay, which will have a free float of about 50 per cent, is set to be the biggest IPO of a private equity company in the UK ever and the largest listing of any UK company since Royal Mail in 2013.
Boosted by the rapid growth in mobile payments and the wider shift from cash to card transactions, the company aims to continue growing at double-digit rates.
Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley, Barclays, UBS, Jefferies, Mediobanca, Canaccord Genuity and Pacific Crest worked on the IPO. Lazard advised Worldpay.
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