CAB Payments targets a £851m market cap when it floats in London next month with a bid price of £3.35
- CAB Payments offers cross-border payments and exchange services
- The financial technology group announced plans for a London listing on June 8
- Many companies are avoiding the British capital in favor of Wall Street for IPOs
CAB Payments has set an offer price of £3.35 per share for its upcoming IPO on the London Stock Exchange, giving the company an implied valuation of £851 million.
The financial technology group announced plans for an IPO in London three weeks ago, saying the move would boost growth, increase transparency and increase ownership.
It said on Tuesday that its issued share capital is expected to include about 254.1 million shares upon admission and a minimum free float of about 40 percent.
CAB Payments announced plans on June 8 to go public in London, saying the move would boost growth, increase transparency and increase ownership
In addition, the company revealed that a share sale would be made by a subsidiary of private equity house Helios Investors, which bought CAB Payments seven years ago.
It will now seek support from major investors for the float before announcing the final bid size sometime around July 6.
Based in Sutton, Surrey, CAB Payments offers cross-border payments and currency exchange services in more than 150 countries, although it specializes in emerging markets.
The fintech group’s revenue climbed to £122 million last year, while underlying profit more than tripled to £56 million.
Bhairav Trivedi, CEO of CAB Payments, said, “I am delighted to announce an attractive offer price to the market.
“CAB Payments has a differentiated business model with an attractive economic profile characterized by profitability, cash generation and strong margins, and benefits from structural growth factors.
“We are pleased with investor engagement so far and look forward to continuing to meet with the institutional and retail investment community over the coming week.”
Positives: ‘CAB Payments has ‘an attractive economic profile’ and ‘benefits from structural growth factors’, said Bhairav Trivedi, CEO of CAB Payments
The impending IPO stems from widespread fears that companies are avoiding the British capital in favor of Wall Street, where they can attract higher valuations from a larger pool of investors.
Since peaking in 2008, the number of listed companies in London has fallen by 40 percent, according to the UK Listing Review, while only 5 percent of IPOs between 2015 and 2020 took place in the British capital.
The day before CAB announced its listing plans, the world’s largest soda ash producer, WE Soda, said it would pursue an IPO in London, which investors predicted could value the company at £7 billion.
But the following week, the Turkish company pulled out, with the CEO citing “extreme investor caution,” a major blow to the UK stock market.
Others who have rejected the British capital include semiconductor maker ARM Holdings, whose parent company Softbank chose New York despite strong lobbying from the British government.
In the first quarter of 2023, the amount raised in London IPOs fell 80 percent year-on-year to £81 million, according to figures from Ernst & Young. Only two listings took place on London’s main market and three on the junior AIM index.
Some companies have also decided to switch their primary listing to Wall Street, such as building materials supplier CRH Holdings, gambling operator Flutter Entertainment and plumbing group Ferguson.