Page 57 - Pay Magazine s2014

Payments IPO tImelIne
volume 9 • spring 2016
Several companies have taken to the public markets, joining payments powerhouses, including banks, the four major U.S. networks and nancial services technology giants, FIS and Fiserv. The list below chronicles last year’s signi cant initial public offerings in payments, along with notable IPOs from the past six years.
NOVEMBER 2015
Square, m-payments service provider
JULY 2015
PayPal, payments service provider
SEPTEMBER 2014
Cachet Financial Solutions, mobile money technology provider; Alibaba, Chinese e-commerce giant
MARCH 2012
Vantiv Inc., payments processor
JULY 2010
Green Dot Corp., nancial technology and bank holding company
source: Paybefore
OCTOBER 2015
CPI Card Group, card producer; Worldpay, U.K.-based payments processor; and First Data Corp., payments processor
OCTOBER 2014
Yodlee, nancial app developer
APRIL 2013
Blackhawk Network Holdings, payments company
OCTOBER 2010
NetSpend Holdings Inc., prepaid card provider
However, capital is more accessible for companies in the public market, especially if they can’t get a high enough price from a prospective buyer, he adds.
IPOs also can be used to pay down debt, First Data being the most recent prime example. First Data
began o cially exploring an IPO in early 2015, eight years after being acquired by private equity rm Kohlberg Kravis Roberts & Co. (KKR) in 2007. First Data said it planned to use the net proceeds from the IPO for the repayment of certain debts, among other uses, according to its SEC ling.
As a public company, First Data isn’t in a position to make any material acquisitions, aside for some small buys that might en- hance its product o er, says Grover. “First Data went public last [year] and it was successful in that it raised capital they can use to pay down debt and reschedule debt,” Grover explains.
Eventually when First Data’s nancial statements look healthier, the company will be able to turn its attention away from debt, accord- ing to Antenen. “It’s going to take KKR a while to start selling shares as an investment, but now it has a path of doing so through public stock,” he explains.
IPOs: Help or Hurt Innovation?
Does going public hurt or help innovation? On one hand, a com- pany has an infusion of capital through the sale of public stock. On the other hand, the company becomes beholden to stockholders, who might not want part of their investment devoted to developing new or improved (but unproven) products and services.
Being a public company has its advantages, according to Antenen. “Once you’re public, you’re a bigger company with broader distribution and more capabilities that you wouldn’t have had as a private company, normally,” he says.
First Analysis’ Berlin agrees going public doesn’t mean a company has to be less innovative, but it does depend on how companies
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