© Reuters. PHOTO: Exterior view of the Nasdaq market in the Manhattan area of New York.
Author: Carolina Mandl
SAO PAULO (Reuters) – Brazilian payments company Elo has selected six banks to manage its initial public offering, according to four sources close to the matter, the first concrete sign that it is following a move first proposed by shareholders in August.
Payment Network – launched ten years ago to compete with Visa Inc (NYSE 🙂 and Mastercard Inc (NYSE 🙂 are planning an IPO on Nasdaq, sources said after the recent successful listing of Brazilian financial companies such as XP (NASDAQ 🙂 Inc and StoneCo Ltd.
Elo chose Morgan Stanley (NYSE :), Goldman Sachs (NYSE 🙂 and JPMorgan (NYSE 🙂 & Co as the main underwriters, as well as the investment banking divisions of their owners Banco Bradesco SA, Banco do Brasil SA (OTC 🙂 and Caixa Economica Federal.
One source said that Elo is seeking a valuation of about $ 7 billion through a share placement, which another source said is likely to happen in the second half of the year. Elo declined to comment on the matter.
Sources said Bradesco, Banco do Brasil and Caixa intend to sell only part of their shares as part of the offer.
Elo plans to use a portion of the IPO proceeds to grow its issuer network. Apart from its three founders, who are among Brazil’s largest lenders, only a few other smaller banks currently issue cards under its flag.
The company, with 132 million outstanding credit and debit cards, also needs to increase acceptance overseas, mainly in Europe and countries such as Mexico and Canada.
The final decision on the US listing has not yet been made, but if it does, Elo will likely also list its Brazilian depositary receipts on the B3 SA exchange in Sao Paulo.
Other local banks may also join the deal by asking them to anonymously disclose their private conversations, two sources said.
Card payments in Brazil grew rapidly during the coronavirus pandemic last year. The country’s cardholder association estimates that card transactions will grow by one-fifth in 2021, after growing 8.2% last year.
Elo, which netted R $ 838 million ($ 149.8 million) last year, ended 2020 with R $ 1.5 billion in cash.
(1 US dollar = 5.5941 reais)
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