Cuscal IPO slated for November

Cuscal has started meeting investors for its initial public offering. Picture: iStock.

Cuscal has begun meetings with prospective investors for its latest float attempt, but those hoping to get a sense on price or the initial public offering size are likely to be disappointed.

Apparently, there’s no colour being offered yet around the metrics of the deal, but investors have been told that the time frame set for the listing is November.

So far, those being talked through the merits of buying into Cuscal have been impressed with what they have seen.

Bank of America, Cuscal’s adviser, is pitching the company as one with a strong track record of earnings growth and as somewhat of an annuity-style investment.

The business provides security and data analysis, and has grown its profit from about $3m to close to $30m over a long time frame.

The opportunity is to grow market share while keeping the costs fixed, providing the possibility for higher margins.

Cuscal planned to list last year on the Australian Securities Exchange but pulled the pin in November during challenging market conditions.

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.

Its initial plan was to raise $367m giving it a $514m market value, yet many in the market expected it may have been more well received with a smaller raise and a lower price.

Shares were then offered at $2.50 each, with a primary issue of $75m and a selldown of $292m.

The price equated to 9.4 times earnings before interest, tax, depreciation and amortisation for the 2024 financial year.

Cuscal is a payments infrastructure services provider in Australia, offering business-to-business services for institutional clients, such as corporates, banks, credit unions, financial technology groups, mutual savings banks and superannuation funds.

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

Previously known as the Credit Union Services Corporation, Cuscal is regulated by the Australian Prudential Regulation Authority as an Australian authorised deposit-taking institution (ADI), and by the Australian Securities and Investments Commission.

Should it hit the boards, it will be one of the only major IPOs this year, with the listing of Guzman y Gomez the only other of any major scale to come to market.