Prepaid debit card provider Green Dot has begun its flotation plans two months after US-based retailer Wal-Mart Stores made a strategic investment in the company.
Wal-Mart said it had no intention to sell its 2.2 million A shares in Green Dot, which manages its prepaid card business.
Green Dot said its other shareholders would convert 3.85 million B shares into A shares for sale in the initial public offering on the New York Stock Exchange. The shares are expected to price at between $32 and $35 each to raise up to $135m, before any extra shares worth a further $20m can be sold. Each A share carries one vote while each B share has 10 votes.
The largest shareholder in Green Dot is US-based venture capital firm Sequoia, which will own 35.2% of the B shares after the flotation. Sequoia has its partner Michael Moritz on Green Dot’s board. Moritz is the legendary investor in Google for Sequoia that at the internet search group’s IPO had seen its $12.5m investment increase to $2bn.
Green Dot is the largest issuer of reloadable prepaid VISA and MasterCard debit cards. Green Dot created reloadable prepaid cards to serve the more than 50 million Americans who can’t get or don’t want credit cards.
For Green Dot’s financial year to end-July 2009, the company had revenues of $234.8m and net income of $37.2m.