Mastercard, the global payments giant, is investing $300 million (Dh1.1 billion) as a cornerstone investor in the planned initial public offering of the Middle East and Africa’s largest payment processing company, Network International.
NI, an affiliate of Dubai's largest lender Emirates NBD, plans to sell a 25 per cent stake on the London Stock Exchange in what could be the first international IPO from the region this year.
Mastercard and NI have also agreed to enter into a partnership to support and accelerate the development of electronic payments in Africa and the Middle East by establishing shared development projects. Both parties will retain and offer their respective independent solutions, and NI fully retains its “scheme agnostic strategy”, they said.
“Over the past 30 years, Mastercard has significantly expanded its footprint and capabilities across the Middle East and Africa,” said Raghu Malhotra, president of the Middle East and Africa at Mastercard. “We are committed to continuing to invest in emerging markets and this cornerstone investment is a great example of this,” he said, adding that NI’s broad geographic reach will complement the company’s existing activities.
Mastercard’s investment in NI will be based on the same terms as institutional investors participating in the IPO, subject to a 9.99 per cent ownership limitation, a 24-month lock-up period and a 36-month standstill not to acquire additional shares without NI board approval. The transaction is conditional on an IPO with an institutional free float of at least 25 per cent.
The existing shareholders of NI, based in Dubai, will sell down their shareholding in the planned offer, the company said earlier this month. It is 49 per cent held by private equity company Warburg Pincus and General Atlantic, and majority held by Emirates NBD, according to Bloomberg, which previously reported that it could be valued at about $3bn.
The company is seeking listing on the main equities market in London and expects that “it would be eligible for inclusion in FTSE UK indexes”, it said, without providing a timeline of the potential IPO or how much it plans to raise from the offering.
Middle East companies are increasingly looking to list shares on the LSE amid lacklustre trading in the local equities markets. The London bourse is home to Abu Dhabi’s NMC Health and Gulf Marine Services. Al Noor Hospitals Group also listed its shares in London in 2013 before it was bought by Mediclinic.
NI group revenues have registered a compound annual growth rate of 13 per cent, to $298m at the end of last year from $235m in 2016 . Its underlying net income climbed to $97.95m in 2018 from $91.762m at the end of 2017, according to the company.
