Dubai: Mastercard will acquire 9.99 per cent of Network International for $300 million as a cornerstone investment in the upcoming initial public offering (IPO).
Network International will list its shares on London Stock Exchange following the IPO next month.
Mastercard’s investment will be based on the same terms as institutional investors participating in the IPO, subject to a 9.99 per cent ownership limitation, a 24 month lock-up period and a 36 month standstill not to acquire additional shares without Network International Board approval. The transaction is conditional on an IPO of Network International with an institutional free float of at least 25 per cent.
The companies have also agreed to enter into a strategic partnership to support and accelerate the development of electronic payments in Africa and the Middle East.
“Today’s announcement will see both parties working on joint development projects and cross-referral arrangements to drive card penetration, usage and acceptance in the MEA region. In addition, it will also enable us to develop and offer new value-added solutions for our clients, through our scalable and secure pan-regional technology platforms,” said Simon Haslam, CEO of Network International.
Mastercard and Network International will support their mutual strategy of growing the payments ecosystem in the world’s most underpenetrated payments market. Mastercard will pay, or invest through, Network International annually for the development and delivery of shared innovation to expand product areas and drive the adoption of digital payments in Africa and the Middle East.
“Mastercard’s commitment to become a cornerstone investor in Network International’s planned IPO with a $300 million investment, demonstrates significant confidence in the strength of the business as we move forward to listing. Network International sits at the heart of the Middle East and Africa’s payments ecosystem, the world’s most underpenetrated payments market, providing investors with the unique opportunity to benefit from the rapid structural shift from cash to digital payments,” said Ron Kalifa, Chairman of Network International.
Under the partnership, Network International and Mastercard will establish shared development projects and cross-referral arrangements for products and value-added services to financial institutions and merchants, including cyber and intelligence tools and tokenization solutions to drive incremental financial benefits to both parties. Both parties will retain and offer their respective independent solutions, and Network International fully retains its scheme agnostic strategy, the company said in a statement.