Payment processor Vantiv Inc filed to go public on Thursday, as appetite for U.S. IPOs seems to be returning following daily deals website Groupon Inc's (GRPN.O) strong listing last week.
Ohio-based Vantiv, owned by Fifth Third Bancorp (FITB.O) and buyout firm Advent International, filed to raise up to $100 million in an IPO of Class A common shares.
In July, the Wall Street Journal reported that Vantiv was planning to file for an IPO that could value the company at as much as $4.5 billion, and hoped to raise between $750 million and $1 billion through the offering.
"Payment processors have been hot across the board," Josef Schuster, founder of Chicago-based IPO investment firm IPOX Schuster, said. "Visa (V.N), MasterCard (MA.N) are trading near their highs ... the underlying indications are that this could be a pretty good offering."
Formerly known as Fifth Third Processing Solutions, Vantiv competes with Global Payments Inc (GPN.N), Total System Services (TSS.N), First Data, Bank of America Merchant Services and Chase Paymentech Solutions.
Forty-year-old Vantiv operated as a unit of Fifth Third until June 2009, when certain funds managed by Advent International bought a majority stake in it in a deal that valued the company at $2.35 billion at the time.
Vantiv's filing is at a time when the U.S. IPO market has begun to show signs of a recovery after a two-month hiatus in the middle of the year.
Europe's debt crisis and a weak U.S. recovery had made it difficult to price issues. With the exception of Groupon's trading debut last week, the U.S. IPO market has largely only seen small companies' listings.
But things are definitely looking up, with at least two well-known companies' IPOs -- Delphi Automotive and Zynga Inc -- expected to list before the end of this year.
In the preliminary prospectus filed with the U.S. Securities and Exchange Commission, Vantiv said its IPO is being underwritten by 11 investment banks, led by J.P.Morgan, Morgan Stanley, Credit Suisse, Goldman Sachs & Co and Deutsche Bank Securities.
"Initial performance (of an IPO) is somewhat related to underwriter reputation," Schuster said.
"High-profile underwriters leave you with a better taste in your mouth, than investing with a second or third-tier company that is taken public by a second or third tier investment bank."
Vantiv, which plans to list on the New York Stock Exchange or Nasdaq, serves over 400,000 merchant and financial institution locations in eight countries, helping them process credit and debit card transactions.
The filing did not reveal the number of shares that would be offered by Fifth Third or Advent International.
Fifth Third, which received $3.4 billion in bailout funds, had sold a piece of the payment processor to Advent International in 2009 as it looked to boost its capital levels in the wake of the financial crisis.
The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO can be different.
(Reporting by Brenton Cordeiro in Bangalore; Editing by Maju Samuel)