Max Grigoryev
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Max Grigoryev in Fundamentality,

One more payment company goes public: Transfirst files for IPO

Transfirst is a provider of payments technologies in the United States. The company earns more than $1.3B for the twelve months ended December 31, 2014. The company gave a nominal IPO size of $100 million. Yesterday we've already checked that another payment processing company goes public - Dorsey's Square

Let's check the operating and financial metrics of the company in order to understand the business opportunities. The company offers not just the payment processing services, but the hardware equipment as well. All the rates and prices varies from the business type. For example, retail merchant account gets $10 monthly fee, 1.65% retail discount rate and 19c cost per transaction. 

  • Transfirst served more than 200,000 merchants during the 2013, processed over $48B in volume in 2014 (the most interesting fact is that there is another s-1 prospectus on NASDAQ website dated July 30, 2014 with absolutely same figures but for 2013 year);

  • The company increased revenue significantly as of June 2015 ($743M in the first half of 2015 vs $598M in first half of 2014);
  • However, the company decreased its marginality. Adjusted net income dropped down from $14.7M as of June 2014 to $1.7 as of June 2015;
  • The company paid $54M dividends in 2012 for the common stock. That's a good sign, however, the company stopped paying dividends and in the latest version of s-1 Transfirst noted that the company "we expect to reevaluate our dividend policy on a regular basis following the offering". I don't think that Transfirst could be a good investment for those who is looking for high dividend yield.

The company seems to be very interesting and promising, what do you think about Transfirst's IPO?