Cuscal looks to lock in cornerstone investor ahead of IPO

Cuscal provides security and data analysis and is a payments infrastructure services provider.

Cuscal is believed to be preparing to lock in a cornerstone investor as part of efforts by the payments infrastructure company to launch an IPO before Christmas.

The group has just finished meeting with fund managers in Asia to familiarise them with the company after earlier talking to Australian investors.

Sources have said efforts are being made to firm up the deal with key investors early on, although others say they have not yet heard any details surrounding pricing.

The IPO is being pitched as a group with a strong track record of earnings growth and as somewhat of an annuity-style investment.

Now making $30m of annual earnings, it has grown over time and there’s an opportunity to grow market share while keeping costs fixed, providing the possibility for higher margins.

The business provides security and data analysis and is a payments infrastructure services provider, offering business-to-business services for institutional clients such as corporates, banks, credit unions, fintech groups, and superannuation funds.

These include credit cards, mobile banking and payments apps, BPAY, ATM services, data management and fraud services.

Cuscal planned to list last year but pulled the pin in November during challenging market conditions. Its initial plan was to have a $514m market value, and the last selldown size discussed was $292m.

Its owners include Bendigo and Adelaide Bank, Mastercard and other mutual banks, and they had hired Bank of America, Ord Minnett and Bell Potter for the initial public offering last year.

The price equated to 9.4 times EBITDA for the 2024 year.