Trading and payment platform provider BPS Technology is looking to raise $28 million in capital, when it launches its initial public offering on Thursday.
The company will join the recent string of IPOs in Australia, as it issues 28 million shares at a price of $1 per share, capitalising the company at about $58.5 million.
Chief executive Trevor Dietz, who has been with the company for 20 years, told SmartCompany BPS’s cutting edge technology uniquely positioned it to gain a big slice of the $20 billion-a-year global trade exchange industry.
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“We are the global leader in this level of technology,” says Dietz. “It is the opportunity for us to position for good growth in not only the Australian market but markets internationally.”
BPS Technology has three divisions in its stable – barter exchange system Bartercard, cloud-based software platform TESS and mobile loyalty app Bucqi.
Dietz says the opportunity to go public arose when the company was approached by the International Reciprocal Trade Association to make its Bartercard technology available to the rest of the world.
“They said, ‘if you do, we’ll endorse you solely as the providers of this technology globally’. Their whole view is this is a step change for the industry,” says Dietz.
Dietz says the trade exchange industry currently does not have a common global system and this move will provide a mutual platform for traders to use. He also says systems in the US are currently very inefficient, leaving the door open for BPS to make its move.
It’s a personal endeavour for Dietz and the company’s other current principal shareholders, chief financial officer Tony Wiese and managing director Brian Hall, who will give up 48% of their stake in the company to the public arena, keeping 52% of the company.
With the valuation of the company at $58.5 million, Dietz is set to make just under $10 million on his third of the remaining stake.
“I joined as employee number 14, it was a tiny little business. We were doing less than $1 million a month” says Dietz. “Now, we’ve done to the barter industry what McDonald’s has done to the hamburger industry.”
He says two years ago, Wiese, Hall and him took a leap of faith when they bought the international parent for the company.
“Now we want to take this to the next level again. This business has so much reach and so much potential,” says Dietz.
Dietz says with just a 0.5% fee on Bartercard transaction, even with just 20% of the market, BPS will be looking $20 million revenue.
“It’s a very high margin industry, so the profit is very strong,” he says.
While the offer will cost the company $3 million, BPS is forecast to generate $51.6 million in revenue, $6.5 million in net profit after tax and pay a dividend of 7.25 cents per share.
Trading will commence on the ASX on September 4, 2014.