Travelex wants to cash in with a £1bn IPO

IPO WATCH: The currency exchange company is going to change up life as a private equity baby for a public listing in London.

by Rachel Savage
Last Updated: 30 Apr 2014

It’s not just retailers that are looking to get rich by sating investors’ appetites for new stocks. Finance companies are keen for some flotation action too, with Lloyds hive-off TSB and over-50s insurer SAGA all hotly tipped to IPO in the next few months.

Fx company Travelex is now also due to join them at the starting blocks this summer, having lined up JP Morgan and Goldman Sachs for a May or June float that could value it at more than £1bn, according to Reuters.

Despite already being a familiar sight to alternately excited/jetlagged travellers at airports and trading in more than 80 currencies and 50 countries, the currency changer hasn’t been sitting on its laurels recently. The company, founded by Lloyd Dorfman in a booth off Kingsway in London in the 1970s and then sold to private equity firm Apax in 2005, bought a 75% stake in a Turkish fx retailer for £24.8m in March. Expansion means lots of potential growth for shareholders to get their teeth into (provided it is sustainable).

The float also looks eminently more sensible than some of the recent retail IPOs: companies including Pets at Home and Poundland were all trading below their offer price at the time of going to press (whether Patisserie Valerie's parent and Card Factory will meet the same fate remains to be seen). With EBITDA of £80.1m in 2013, a £1bn listing would value the company at 12.5 times its earnings. White goods e-tailer AO World’s valuation was a frothtastic 72 times its projected 2015 EBITDA.

Investment banks may have got a bit over-excited about IPOs, but it looks like they might finally be figuring it out.

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