Dubai: Network International, a leading payment solutions provider in the region is planning to go for an initial public offering (IPO) on the London Stock Exchange, Emirates NBD, the majority shareholder in the company said in a statement.
“In the event Network’s shareholders decide to proceed with any transaction, further announcements will be made in due course in accordance with the applicable laws and regulations,” Emirates NBD said in a statement.
Network International said yesterday that it has not taken any decision of what per cent to shares will be listed on LSE, but clearly there would be a UKLA [United Kingdom Listing Authority] requirement to list at least 25 per cent of the business should the company confirm the intention to float.
While flotation is one of the strategic options the company is considering, LSE is the preferred market on which the company wants to list its shares.
“An IPO is one of several strategic options Network International, along with its shareholders, is evaluating. Considering the global nature of our business, London would be an option for a listing given its mature and developed fintech/payments sector. In addition, it also has one of the world’s deepest pools of capital, access to a wide investor base and a balanced and respected framework of regulation and corporate governance,” said Simon Haslam, Group CEO of Network International.
Sources said the company is working with Citigroup Inc, Emirates NBD Capital, JPMorgan Chase & Co., Morgan Stanley, Barclays Plc, Goldman Sachs Group Inc, Liberum Capital Ltd and Evercore Partners International LLP on the IPO. Listing would value the company at about $3 billion according to investment banking sources.
Emirates NBD is expected to make a capital gain of as much as Dh3 to Dh4 billion on a valuation of $2.5 to $ billion for Network International, Arqaam Capital said in a note.
While it is still unclear if the stock holdings of current shareholders will be proportionately diluted following the IPO, company sources said the current owners will remain significant and committed shareholders after listing and will be giving undertakings typically given in the IPO context to that effect.
In addition to a 51 per cent Emirates NBD shareholding, private equity firms Warburg Pincus and General Atlantic acquired Network International in December 2015, in a pure equity transaction.
Network emerged as the dominant player in payment solutions business in the Middle East and Africa region following its acquisition of Emerging Markets Payments Holdings Limited (EMP) from private equity investor Actis in March 2016 which expanded Network into more than 50 countries across Africa and the Middle East. Some new territories included Jordan, South Africa and Nigeria.
Network International has announced changes to its Board as part of the process of potentially becoming an independent business. “As it welcomes the new members, Emirates NBD acknowledges the instrumental role played by outgoing Chairman, Abdulla Qassem in Network International’s 25 year journey to becoming a global payments company. His exceptional leadership and invaluable guidance have shaped Network’s success and progress as a leading company in the payments domain,” Emirates NBD said in a statement.
MEA market leader in payments
Network International has the leading market position in several countries across Middle East Africa region where strong growth is forecast in both merchant acquiring and issuer solutions, supported by rising consumer spending, attractive demographics and access to mobile technology.
The company has 19 per cent market share in merchant solutions and 24 per cent share of issuer solutions. Revenue comes 46 per cent from merchant solutions, 53 per cent from issuer solutions. Leading merchant customers include Dubai Duty Free, Emirates, Four Seasons, Jumeirah while leading issuer customers are Emirates NBD, Standard Bank, First Bank and Abu Dhabi Commercial Bank.