Interswitch in fresh expansion push, considers IPO in London, Lagos

Interswitch Limited, which processes payments for banks and owns a brand of debit cards in Nigeria, is considering initial public offerings in London and Lagos next year as it plans further expansion into new African markets.

According to Bloomberg, the technology company has discussed share sales with international banks including Bank of America Corp., Barclays Plc and Standard Bank Group Limited and may choose advisers for a transaction within a few months.

Mitchell Elegbe, chief executive officer at Interswitch, said, “we’re looking at doing an IPO”. Elegbe, who founded Interswitch in 2002, in an interview in  Lagos, stated, “we’re looking at the United Kingdom (UK) and Nigeria. Our industry is one that investors love. They understand it, especially in places like the U.K.”

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 Co.’s dual listing in April last year.

The London Stock Exchange has more than 120 listed African companies and expects about five Nigerian offerings over the next year, Ibukun Adebayo, cohead of emerging-primary markets, said last month.

The Nigerian Stock Exchange (NSE) All Share Index has gained 14 percent over the past three months after falling 16 percent last year before elections and as sliding oil prices hit Africa’s largest crude producer. The measure fell 0.3 percent as of 1:42 p.m. in Lagos on Monday.

Interswitch is about 70 percent-held by Londonbased private equity group Helios Investment Partners LLP, South Africa’s Adlevo Capital Managers LLC and the International Finance Corp., 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 look to use any capital it raises to fund further expansion, Elegbe said, declining to disclose the company’s revenues or profits.