Adyen Moves Toward Stock Offering, Sets Its Valuation at up to $8.3 Billion

Dutch payment processor Adyen B.V., which has a major U.S. presence, took another step toward its planned stock sale Tuesday when it published an offering prospectus and estimated its market capitalization at between €6.5 billion and €7.1 billion ($7.6 billion to $8.3 billion).

Fast-growing Adyen is one of the most-watched unicorns—private companies with estimated valuations of $1 billion or more—in the payments industry. The 12-year-old company’s current market-cap estimate is about three times the $2.3 billion valuation an investment firm estimated for it in late 2015.

The so-called secondary stock offering involves certain existing Adyen shareholders, including institutional investors, selling up to 14.2% of the company’s shares. Adyen itself is not selling any shares. The offering is expected to be priced June 12, with trading set to begin the next day on the Euronext Amsterdam stock market.

“This offering provides us with the freedom to keep building the company, while offering our shareholders a path to liquidity,” Pieter van der Does, Adyen’s co-founder, president and chief executive, said in a news release. “Adyen will remain a company that is driven by a long-term vision and strategy.”

Adyen estimated the value of the offering will be between €922 million and €947 million ($1.08 billion and $1.1 billion). The predicted price per share is between €220 and €240 ($257 and $280).

Reasons for Adyen’s high valuation include its client list of prominent merchants, high growth rate, and strong financials. Customers include Uber, Netflix, Facebook, Spotify, Etsy, Vodafone, Sephora, Tory Burch, L’Oréal, and Booking.com. In a recent coup, Adyen landed eBay Inc.

Adyen’s transaction count increased at a compounded annual rate of 103% between 2015 and 2017, ending last year with 3.7 billion, according to the company. Compounded annual processed payment volume grew 84% in the same period, hitting €108.3 billion in 2017. In 2018’s first quarter, payment volume rose 42% to €33.2 billion ($38.7 billion) from a year earlier on a 50% increase in transactions to 1.2 billion.

Net revenues and net income grew at compounded annual rates of 49% and 46%, respectively, between 2015 and 2017. In the first quarter, Adyen reported net income of €24.1 million ($28.1 million), up 71% from the year-earlier quarter, on revenues of €74.4 million ($86.8 million), a 67% increase.

Adyen’s prospectus, however, warns that high growth rates may not be sustained. The filing also notes that the company depends on a handful of large merchants for a significant share of its revenues. The top 10 merchants generated 33% of net revenues in 2017, and the 120 largest merchants brought in 69% of revenues. In addition, most of Adyen’s merchant contracts are for indefinite periods that have one-month termination options.

Adyen had 668 full-time equivalent employees at the end of 2017, nearly double the 338 employees two years earlier. Its U.S. headquarters is in San Francisco.