Brazilian acquirer and card processor VisaNet has registered
with the country’s banking regulators its intention to hold an
initial public offering (IPO), after a drawn-out process which has
been on hold since late last year.
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VisaNet is planning to offer shares on the Sao Paolo Stock Exchange
(Bovespa) in the next 90 days, according to its bank shareholders,
although a specific date has not been set.
Banco Bradesco owns 40 percent of VisaNet; Banco do Brasil owns 32
percent; and Banco Santander, through its ABN Banco Real
subsidiary, owns 14 percent. Visa owns 10 percent of VisaNet, with
the remaining 4 percent held by other investors.
VisaNet’s IPO is set to be one of the largest in Brazil and could
raise between BRL5 billion ($2.33 billion) and BRL10 billion. It
will also be the first IPO in Brazil this year following a drought
brought on by the global economic slowdown, which also led to
VisaNet postponing its IPO plans in December 2008, having
originally issued a preliminary prospectus in September of that
year.
VisaNet has not yet said how many shares it will be offering.
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By GlobalDataDeutsche Bank equity analyst Mario Pierry estimates that Banco
Bradesco and Banco do Brasil could find their stakes in VisaNet to
be worth a total of BRL17.9 billion.
According to Pierry, VisaNet’s implied market value of BRL25
billion would give Bradesco a stake worth BRL9.9 billion, and Banco
do Brasil a stake worth BRL8 billion.
In July 2007, VisaNet’s major rival Redecard, which acquires and
processes MasterCard transactions in the country, held an IPO which
raised BRL4.64 billion, and in February this year, US banking giant
Citi offloaded its 17 percent stake in Redecard, bringing Citi
BRL2.8 billion.
VisaNet IPO will attract interest
There is likely to be huge interest in Visa-Net’s IPO – US payment
consultancy First Annapolis recently ranked VisaNet as the
8th-largest card acquirer in the world, based on credit and debit
purchase transactions in 2007.
According to First Annapolis, Brazil card payment volumes have been
growing at stratospheric rates of growth in the order of 20 percent
to 40 percent per year.
“Brazil is a market with very high revenues by international
standards,” said Marc Abbey, a managing partner at First
Annapolis.
“Merchant discounts are high by international standards, and
terminal economics are attractive by Latin American
standards.
“In addition, Brazil enjoys a lucrative revenue stream that results
from factoring settlement receivables for merchants, receivables
that would otherwise be settled to merchants on a 28-day cycle, an
artefact of the inflationary era.”
Purchases made with credit cards, debit cards and in-store
financing totalled BRL388.7 billion in 2008, a rise of 24 percent
compared to 2007, according to ABECS, the Brazilian credit card
industry association. Of the BRL388.7 billion figure, credit card
spending represented BRL223 billion, a rise of 22 percent compared
to 2007.
The industry body cited the ongoing migration to electronic
payments, expansion of point of sale locations and new banking
customers being issued with payment cards as the major factors
behind the big increase.
Over the last couple of years, VisaNet has expanded the range of
services and technology on offer in Brazil, such as mobile phone
payment services and acquiring Visa payWave contactless card
transactions in conjunction with its bank partners.
