The offering will provide a strong gain for investors JLL Partners and Oak Investment Partners.
The NetSpend IPO was slated to launch last week but instead opened today at $11.20 a share. On a down day for Wall Street, the stock closed at $13.00, up $2 from its $11 offer price.
Austin-based NetSpend provides reloadable prepaid debit cards to the underbanked U.S. consumer. Oak Investment acquired NetSpend through a recap in 2004. NetSpend in 2008 bought Skylight Financial from JLL Partners, a New York PE shop. Before the IPO, Oak Investment owned 46.5% of NetSpend while JLL had 32.2%. Millennium Technology Value Partners had 5.6%, according to a regulatory filing.
NetSpend yesterday priced 18.5 million shares at $11 each, the midpoint of its $10 to $12 deal range, raising $203.5 million. NetSpend itself is only selling about 2.3 million shares. The rest is coming from other shareholders.
Both Oak Investment and JLL sold shares in the IPO but are retaining stakes. Oak Investment, a VC firm with offices in Westport, Conn., Minneapolis and Palo Alto, Calif., offered about 5.1 million shares. Its ownership will fall to 39% and the firm is expected to receive about $56 million from the sale (at $11 each). The firm’s remaining stake of 34.5 million shares is valued at roughly $448 million (at $13.00 share).
JLL, meanwhile, sold 3.6 million shares for roughly $40 million. The firm’s stake of roughly 24 million shares is valued at $312 million. JLL’s stake, after the IPO, falls to 27% from 32.2%.
Millennium Technology Value Partners, a New York VC firm, did not sell shares in the IPO. The offering will dilute its holding to 5.4%. Millennium owns about 4.8 million shares, valued at about $62 million.
Underwriters on the deal have a greenshoe option to buy an additional 2.8 million shares.
Goldman Sachs and BofA Merrill Lynch were joint bookrunners on the IPO. Other underwriters include William Blair, SunTrust Robinson Humphrey, Wells Fargo Securities, Duncan-Williams, Inc., and Knight/Houlihan Lokey, according to a statement.