* Payments systems company prices shares at A$2.75 each
* Aims to raise A$287 mln
* Has had a better reception than other recent IPOs in Sydney
* Fact it is not majority owned by private equity seen as positive (Adds fixed issue price)
By Scott Murdoch and Byron Kaye
HONG KONG/SYDNEY, Dec 2 (Reuters) - Australia’s Tyro Payments Ltd set the price that institutional investors will pay for its shares at A$2.75 each, as it aims to raise up to A$287 million ($195 million) in its initial public offering in Sydney.
The payment systems company said in a statement on Monday that the price would be fixed at the top of the A$2.50 to A$2.75 per share range which had previously been given to investors.
The timing of the IPO was bought forward a day following strong interest at the road show and the books will now close at midday on Tuesday, Sydney time (0100 GMT).
Sydney’s IPO market is tough and has seen a number of cancellations recently, but Tyro’s offering has had a better reception so far from investors who like its longer-term prospects and the fact that it is not majority owned by private equity firms.
Tyro will sell 104.5 million shares and the company will have a market capitalisation of A$1.36 billion, according to a term sheet seen by Reuters that was earlier distributed to prospective investors.
The IPO consists of about 45.5 million shares and 58.9 million secondary shares sold by the company’s existing shareholders. The shares will start trading in Sydney on Friday.
Tyro, which sells EFTPOS machines and payment services via a digital app to businesses, competes with payments companies such as San Francisco based Square Inc.
The Sydney-based company expects to report a fourth straight annual loss in fiscal 2020, according to its prospectus. However, it has delivered a compound annual growth rate of 29% in revenue and gross profits since 2014, a recent company presentation shows. Its gross profit is expected to grow about 20% in fiscal 2020 to A$100 million.
Tyro plans to use proceeds from the IPO to fund future growth and broaden its shareholder base.
Its IPO term sheet showed that U.S. investment fund Tiger Global will sell 26.43 million shares in the offering, former Tyro Chief Executive Jost Stollman will offload 15.98 million shares and non-executive director David Fite will sell 4 million shares. A separate group of shareholders will sell 12.5 million shares.
After the IPO, Tyro’s major shareholders will be Atlassian Corp PLC co-founder Mike Cannon-Brookes who will hold 13.69%, and Australian investment firm TDM Growth Partners at 13.26%. Neither of the two investors are selling stock in the IPO.
The term sheet showed that cornerstone investors have subscribed for $A140 million worth of Tyro stock. ($1 = 1.4736 Australian dollars) (Reporting by Scott Murdoch and Byron Kaye; Editing by Kim Coghill/ Christopher Cushing/Susan Fenton)