Interswitch Considers Dual Listing in London, Lagos for Expansion

Interswitch Limited, which processes payments for banks and owns a brand of debit cards in Nigeria, is considering an initial public offering (IPO) in London and Lagos next year, as it plans an expansion into new African markets.
The company has discussed share sales with banks including Bank of America Corp., Barclays Plc and Standard Bank Group Limited and may choose advisers for a transaction within a few months, Chief Executive Officer Mitchell Elegbe said.
“We’re looking at doing an IPO,” Elegbe, 43, who founded Interswitch in 2002, said in an interview in Lagos on May 28. “We’re looking at the UK and Nigeria. Our industry is one that investors love. They understand it, especially in places like the UK.”
Interswitch, which operates in five African countries and owns Verve, a Nigerian provider of debit cards, would be the second company from the country to sell ordinary shares in both London and Lagos after Seplat Petroleum Development Compay’s dual listing in April last year.
The London Stock Exchange (LSE) has more than 120 listed African companies and expects about five Nigerian offerings over the next year, Ibukun Adebayo, co-head of emerging-primary markets, said last month.
The Nigerian Stock Exchange All Share Index (NSE-ASI) has gained 14 per cent over the past three months after falling 16 per cent last year before elections and as sliding oil prices hit Africa’s largest crude producer. The index fell 0.3 per cent as at 1.42 p.m. in Lagos monday.
Interswitch is about 70 per cent held by London-based private equity group Helios Investment Partners LLP, South Africa’s Adlevo Capital Managers LLC and the International Finance Cororation, a unit of the World Bank, according to Elegbe.
There’s no guarantee of an IPO and the owners may instead decide to sell their holdings to a company, said Elegbe, who is also a shareholder.
Helios bought 52 percent of Interswitch for $96 million in December 2010, according to its website.
Interswitch has grown rapidly since then amid a proliferation of automated teller-machines and point of sale devices in Nigeria and it may seek to use any capital it raises to fund further expansion, Elegbe said, declining to disclose the company’s revenues or profits.
“We’re a very liquid company,” he said. “But that’s not to say that if we go to the stock exchange we can’t achieve things a lot faster and on a bigger scale.”
Interswitch would be the first Nigerian technology business to list in the UK, according to Elegbe. Local competitors include E-Tranzact International Plc, which has a market value of N14.2 billion ($71 million).
While Nigeria is “by far” Interswitch’s biggest market, it also has operations in Kenya, Tanzania, Uganda and Gambia, according to Elegbe.
The company plans to move into Cameroon, Democratic Republic of Congo and Ghana, he said.
• Culled from Bloomberg

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