Thursday , March 21, 2019

EVO Payments Explores Going Public

EVO Payments International says it plans to go public and has filed an S-1 registration statement with U.S. Securities and Exchange Commission. The Atlanta-based payments company announced the move late Wednesday.

Though the registration statement does not reveal how much EVO expects to raise by going public, the company says it will use the proceeds to pay off debt and to repay in full the deferred purchase price of $70 million for the Sterling Payment Technologies LLC acquisition it made in 2017. Remaining amounts will be left for general corporate use, the document states. Some media reports indicate EVO hopes to raise $100 million.

EVO has been on an acquisition tear in the past few years, not only with domestic deals, but international ones, too. Of the six acquisitions it highlights in the filing, the Sterling deal is the sole domestic deal. The others were for companies in Poland, Mexico, the Czech Republic, the United Kingdom, and Spain.

Among the revelations in the filing are that EVO had revenue of $504.8 million in 2017, and a net loss of $32.3 million.

EVO says it services approximately 525,000 merchants in North America and Europe. In North America it processes more than 900 million annual transactions, and in Europe 1.7 billion transactions.

“We believe there is considerable opportunity for growth not only in new markets, but in our existing markets as well,” the filing states. “Many of our international markets are less mature than the U.S. market with respect to the growth drivers of our business. Specifically, these markets exhibit higher overall personal consumer expenditure growth, provide more opportunity for cash-to-card conversion, offer more penetration of integrated, business-to-business and e-commerce solutions, and present upside growth opportunities with new financial-institution partners.

As for the U.S. and Canada, EVO sees potential because of the technology shift, which includes increased merchant use of advanced point-of-sale systems, in payments. “Our focus stems from integrated payments and e-commerce solutions, which currently comprise a significant portion of our business,” EVO notes. “These solutions currently enjoy a premium growth rate to the traditional POS systems, and we expect this trend to continue for the foreseeable future.”

EVO, which has U.S. headquarters in Melville, N.Y., works with 1,400 independent software vendors and integrated POS system dealers, as well as gateways and 11 financialinstitutionreferral partners. The company also uses a direct sales team.

EVO operates three in-house processing platforms. Each services different regions and connect via the EVO Snap service, which provides a technical connection to EVO’s regional processing systems and a central integration point for all of its third-party vendors.

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