TransFirst, backed by Welsh Carson, explores IPO: Sources

transfirst

TransFirst, which is owned by Welsh, Carson, Anderson & Stowe, is considering going public, four banking sources said.

Hauppauge, New York-based TransFirst has not hired an investment bank for the prospective offering, the people said. An IPO would likely come in 2015, one of the sources said.

“They’re definitely exploring an IPO,” the source said

TransFirst, one of the largest providers of secure payment processing in the United States, handles about $48 billion in annual transaction volume for about 200,000 merchants and financial institutions, according to its website. The company employs more than 1,000 employees. TransFirst produced about $223 million in net revenue for the 12 months ended Sept. 30, Moody’s Investors Service said in a December note.

A possible IPO comes after a failed auction process for TransFirst in 2012. TransFirst had hoped for bids of $1.3 billion to $1.5 billion. The auction did not produce a buyer. TransFirst opted instead to pursue a dividend recap; a roughly $200 million distribution went to common and preferred shareholders, Moody’s said at the time.

An IPO would provide an exit for Welsh Carson, which is out fundraising. The New York PE firm acquired TransFirst in 2007 for $683 million from GTCR. The deal included $495 million in debt, Thomson Reuters Loan Pricing Corp. said. Welsh Carson is currently seeking $3 billion for its 12th pool, peHUB has reported.

Though it may file for an IPO, some doubt that TransFirst will actually go public. Instead, the payment processor would likely go the route of Mercury Payments Systems. Mercury, a non-bank payment processor owned by Silver Lake, filed to go public in March. Two months later, the company had inked a $1.65 billion sale to Vantiv LLC, another large payment company.

“TransFirst will probably trade versus an IPO,” a private equity executive said.

Executives at TransFirst declined comment. Welsh, Carson could not be reached for comment.

Photo courtesy of Shutterstock

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