Payments company Cuscal shelves its IPO

Tough market conditions have prompted Cuscal to call off its float. Picture: Gaye Gerard

Cuscal has shelved its plans to list on the Australian Securities Exchange during what are challenging market conditions.

The payments company is owned by shareholders, including Bendigo and Adelaide Bank, MasterCard and other mutual banks that had hired Bank of America, Ord Minnett and Bell Potter for the initial public offering.

Investors were told that “factors have arisen in the external environment that create headwinds for an IPO process in the short term” despite it being what the advisers described as “a highly desirable business”.

“In the best interests of shareholders, the Cuscal board considers it prudent to pause the IPO process and recommence in 2024,” it said.

Cuscal last week adjusted the structure of its float to a back-end book build where shareholders are allocated stock after it has been priced.

Its 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 sold 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.

The book build was to be held from November 21 ahead of trading on November 24.

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.