Vantiv Prices IPO at $17, Midpoint of Range: Underwriter

 
on March 21 2012 9:00 PM

Payment processor Vantiv priced shares in its $500 million initial public offering at the midpoint of its expected range on Wednesday, according to an underwriter.

The Cincinnati, Ohio-based company sold 29.4 million shares, as planned, at $17 each, against a $16 to $18 range. Vantiv, which was spun off from regional bank Fifth Third in 2009, will use the proceeds to repay loans.

Private equity firm Advent International owns a 51 percent stake in Vantiv, while Fifth Third holds a 49 percent stake.

In 2011, Vantiv's revenue grew 40 percent to $1.6 billion. Profit increased to $84.8 million from $54.9 million the year before.

The company helps merchants and banks to process credit and debit card transactions. Competitors include First Data, Total System Services, Chase Paymentech Solutions and Global Payments Inc.

Payment processing firms are attractive to investors because they generate strong cash flow, said Larry Berlin, an analyst with First Analysis Securities Corp.

Their growth is consistent and regular so it can be attractive to an individual investor or to private equity, he said.

Vantiv generates revenue from transaction fees paid by merchants or financial institutions every time it processes a credit or debit card.

Credit card dollar volume rose 7.6% in February over the year prior, while debit card volume rose 9.2%, according to First Data's SpendTrend tracker.

Vantiv is just one of six offerings to hit the public markets this week. On deck are software company ExactTarget, electronic exchange BATS Global Markets, Chinese e-commerce company Vipshop, quartz-countertop maker Caesarstone Sdot-Yam and oil and gas spin-off Whiting USA Trust II.

Vantiv's IPO underwriters include J.P. Morgan, Morgan Stanley, Credit Suisse, Goldman Sachs and Deutsche Bank.

Vantiv will begin trading on the New York Stock Exchange on Thursday under the ticker VNTV.

(Reporting By Olivia Oran; Editing by Richard Pullin)

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