Abu Dhabi, UAEFriday 23 August 2019

Network International shares rise 17% in London trading debut

The Dubai payments processing company lists on the London Stock Exchange

Network International will be among the first companies of scale to test investor appetite in Europe’s lackluster IPO market. Reuters
Network International will be among the first companies of scale to test investor appetite in Europe’s lackluster IPO market. Reuters

Network International opened at 510 pence, gaining 17 per cent above its opening price of 435 pence per share in its debut on the London Stock Exchange on Wednesay.

The initial public offering is London’s biggest of the year as the Dubai company joined the ranks of Middle East-based entities trading on the LSE.

The payments processing company expected an implied market value of £2.175 billion (Dh10.44bn) based on offer price and number of shares issued.

"The Middle East and Africa are at an early stage in the shift from cash to digital payments and our new listing on the London Stock Exchange will enable all new shareholders to benefit from this structural growth opportunity," said Simon Haslam, chief executive of Network International. "Network International is extremely well positioned for future growth with unique scale in the world’s most under-penetrated payments markets."

Network International will be among the first companies of scale to test investor appetite in Europe’s lacklustre IPO market, where concerns over Brexit and slowing growth in Germany and France have helped push volumes at the start of the year to the lowest level since the financial crisis, according to Bloomberg.

The books were “multiple times oversubscribed throughout this price range”, a statement said.

Barclays and Goldman Sachs were joint bookrunners on the deal, Liberum was co-lead manager, while Evercore was financial adviser to the company. Emirates NBD Capital, JP Morgan and Morgan Stanley were joint global co-ordinators. Citigroup was sole sponsor and global co-ordinator.

The institutional offer comprises 200 million shares, assuming no over-allotment option was exercised and excluding the cornerstone investment, resulting in a free float of 40 per cent, the company said.

The Dubai payments company was founded in 1994, and in March appointed Ron Kalifa, former chief executive of WorldPay, to oversee the IPO as chairman.

The IPO is the biggest listing on the LSE since WorldPay raised $2.8bn in 2015. LSE managers were bouyed by the floatation as the market wrangles with Brexit uncertainty.

“From a regional perspective, it is a very important flagship IPO. We are delighted that they chose London,” said Gokul Mani, head of Primary Markets for Middle East, Africa and India at the LSE.

Since 2014, technology companies on LSE have raised over $37bn in IPO and follow-on capital.

Private equity companies Warburg Pincus and General Atlantic own 49 per cent of Network International, with the remaining 51 per cent belonging to Emirates NBD.

In 2018, the company processed $40bn in total processed volumes over its MEA segments. The Middle East represented 75 per cent of Network International’s total revenue last year, with the remaining 25 per cent of sales in Africa.

There are 141 companies from the Middle East and Africa listed on the LSE, with an aggregate market capitalisation of $192bn. The latest offering is expected to bring more interest from the region.

"Success breeds success in capital markets,” said Mr Mani. “If you have a precedent of success for a certain type of company on a certain exchange it could lead to other companies following in their footsteps, possibly employing a similar offering.”

Updated: April 10, 2019 12:13 PM

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