Tyro Payments to list on ASX following $287m IPO

Tyro Payments ASX IPO TYR eftpos
Tyro Payments is expected to float on the ASX this Friday with a market capitalisation of $1.36 billion.

Financial technology company Tyro Payments (ASX: TYR) is set to make its ASX debut on Friday with a market capitalisation of around $1.36 billion following an oversubscribed initial public offering.

The Sydney-based eftpos machine provider and business lender lodged its prospectus with the Australian Securities and Investments Commission on 18 November, aiming to raise between $272.4 million to $287.1 million based on an indicative price range of $2.50-$2.75 per share.

This offer values the enterprise at $1.08-$1.2 billion and implies a market capitalisation of up to $1.36 billion.

Earlier this week, co-lead manager Morgan Stanley reportedly sent a book message to listed equities investors announcing the price has been fixed at $2.75 per share and was “multiple times oversubscribed at that level”.

“Allocations, as directed by the company, were heavily skewed in favour of large, long-only, domestic and international investors that participated in the management roadshows – there have been significant scale-backs across the book,” Morgan Stanley’s note read.

Books closed at midday on Tuesday with the commencement of trading on the ASX scheduled for this Friday under ticker code ‘TYR’.

Business banking solutions

The 16-year-old Sydney-based company sells Eftpos machines and payment services via a digital app to businesses and competes with payment processing companies such as US-based Square Inc (NYSE: SQ). It also offers business loans up to $100,000.

Tyro claims to be the fifth largest merchant-acquiring bank, behind the ‘big four’ banks, with more than 29,000 clients mainly comprised of small to medium businesses in the health, hospitality and retail sectors.

“As a tech-driven enterprise we are well placed to understand and assist in reducing the friction [small to medium businesses in Australia] often experience in their payments and banking activities,” Tyro chief executive officer and managing director Robbie Cooke said.

“Our focus remains firmly on challenging the status quo for the benefit of our merchants.”

The company’s existing high-profile shareholders include Tyro chairman former Telstra chief executive officer David Thodey, as well as tech billionaire Mike Cannon Brooks of Atlassian.

In his chairman’s letter, Mr Thodey said the IPO funds would provide increased financial flexibility to support the company’s growth strategy.

“This includes expanding our payments and banking offerings; increasing our merchant base in our existing core verticals; entering two new industry verticals – accommodation and services; driving our e-commerce offering; production innovation; and potential M&A and strategic partnerships,” he said.

According to its prospectus, Tyro reported a net loss after tax of $18.7 million in the 2019 financial year and expects to post its fourth consecutive annual loss in the 2020 fiscal year.