Digital Transactions Authoritative, insightful and timely information for payments professionals
Mercury Payment Systems LLC may be considering a move to take the independent sales organization public.
On Friday, Durango, Colo.-based Mercury issued a release disclosing it had filed a confidential draft registration statement with the U.S. Securities and Exchange Commission that may presage the payment company’s public stock offering.
Such filings enable the commission to review documents prior to an initial public offering, and without public review, at least 21 days before the issuer embarks on a road show, according to the SEC. Mercury will not comment beyond its press release.
It was only three years ago when Mercury said private-equity firm Silver Lake had grabbed a 60% stake in the company. Mercury told Digital Transactions News then that the company sought a partner so it could keep growing. The remainder is owned by founders, and brothers, Marc and Jeffrey Katz, Mercury says.
Mercury serves 80,000 small and medium-size merchants and works with a network of 500 point-of-sale system developers and resellers that potentially can reach about 1 million merchant locations, the company says.
Mercury has cultivated deals with independent software vendors and offers products for brick-and-mortar merchants. In August, it began to offer PayPal’s mobile wallet acceptance service to merchants. It also provides traditional payment terminals, electronic cash registers, and mobile POS equipment in addition to e-commerce payments.
Publicly traded payment companies are often favored by investors for several reasons, says Gil Luria, managing director for Los Angeles-based Wedbush Securities.
Current investors take a company public so they can recoup their investments, he says. Owners may feel the stock market is richly rewarding payment companies, and management may want to generate revenue to fuel acquisitions or pay for other needs, he says.
“On the demand side, I would say that there is demand for investments in payments companies that can show growth and benefit from the electronification of payments,” Luria says.
The most recent major payment companies to go public include prepaid network provider Blackhawk Network Holdings Inc., which opened in April at $25 per share, and digital wire-transfer company Xoom Corp., which opened at $21 per share.
