Cuscal has initiated meetings with potential investors for its upcoming float, but those expecting details on the size of the initial public offering (IPO) may be left wanting. The company has yet to disclose key metrics of the deal, although investors have been informed that the listing is targeted for November.
If successful, Cuscal’s listing will be one of only a few major IPOs this year, alongside Guzman y Gomez.
Early discussions with investors have generated a positive response, with many impressed by Cuscal’s offering. Bank of America (NYSE:BAC), serving as Cuscal’s adviser, has positioned the company as one with a solid track record of earnings growth, presenting it as an annuity-style investment opportunity.
Cuscal, which provides security and data analysis services, has expanded its profit from around A$3 million to nearly A$30 million over an extended period. The company sees an opportunity to grow its market share while maintaining fixed costs, offering the potential for higher margins.
Second listing attempt
This is Cuscal's second attempt to list on the ASX, having postponed its initial plan last November due to unfavourable market conditions. The company’s owners, including Bendigo and Adelaide Bank (ASX:BEN), Mastercard (NYSE:MA), and several mutual banks, had previously engaged Bank of America, Ord Minnett and Bell Potter to manage the IPO.
Last year, Cuscal aimed to raise A$367 million, targeting a market value of A$514 million. However, some in the market believed the offering might have been better received with a smaller raise and a lower price. Shares were offered at A$2.50 each, equating to 9.4 times the company's forecast earnings before interest, tax, depreciation and amortisation for the 2024 financial year.
Cuscal provides payments infrastructure services for institutional clients, including corporates, banks, credit unions, financial technology groups and superannuation funds. Its offerings include credit cards, mobile banking apps, BPAY, ATM services and fraud prevention services.