Science Park Company Higher One Hits Higher Ground
(4/13/2010) Higher One Rockets to IPO
from Conntact.com, April 12, 2010
Goldman Sachs, UBS to lead $100M issue
NEW HAVEN - Higher One Holdings Inc., the fast-growing Science Park company that provides ATM cards to college students and other financial services to students and colleges, plans to go public.
The company has filed a prospectus for an initial public offering of up to $100 million with the U.S. Securities & Exchange Commission, while acknowledging in its filing the uncertainty created by the potential for federally mandated changes to the student loan industry. One of Higher One's revenue streams stems from providing colleges with financial aid payment systems.
Mark Volchek Founder and CFO
The company has filed a prospectus for an initial public offering of up to $100 million with the U.S. Securities & Exchange Commission, while acknowledging in its filing the uncertainty created by the potential for federally mandated changes to the student loan industry. One of Higher One's revenue streams stems from providing colleges with financial aid payment systems.For 2009, Higher One's revenue soared 72 percent, to $75.5 million, from the year before. The SEC filing did not reveal how many shares of stock will be sold, when the IPO may take place or any other such details. Company officials declined to comment.
"I'm not surprised they want to go public," says Anthony R. Rescigno, president of the Greater New Haven Chamber of Commerce. "This company has been a methodical skyrocket. They've done a great job and put lots of people to work, and we are proud of them."
Higher One has grown to employ 380 people since it was founded in New Haven in 2000. Rescigno praises the company's founders for their record of success, their innovative style, and their entrepreneurial spirit.
Headquartered at 25 Science Park, Higher One Inc. was founded by Yale College students Mark Volchek, Miles Lasater and Sean Glass. The holding company was formed in 2008, and in 2009 the company bought Informed Decisions Corp. and renamed it Higher One Payments Inc.
According to the prospectus, "We have experienced significant growth since our inception in 2000, which we believe demonstrates the benefits and convenience our products provide to our customers, as well as the complementary nature of our higher education institution services and student services."
At the end of 2009, more than 600 colleges had contracted with Higher One to provide various financial services, and the company had customers in 46 states. According to the filing, 88 percent of Higher One's revenues come from ATM fees and other banking services fees.
Proceeds from the planned IPO will mostly go toward paying off debt, the company says.
The IPO will be led by Goldman, Sachs Co. and UBS, and the plan is to list the company on the NASDAQ Global Select Market. Stock ownership would be concentrated primarily among company insiders, the prospectus says.
The Obama administration has proposed eliminating private businesses from the student financial-aid business, which Higher One concedes may affect future revenue growth in its prospectus.
Still, growth prospects remain robust. According to the prospectus, "With nearly 7,000 higher education institutions in the U.S. accepting new students each year and providing finance and payments functions that serve their campus communities, the higher education payments industry is both large and stable. As an industry innovator focused on the needs of higher education institutional clients, we believe we are well positioned to capitalize on several key industry trends and to increase our market share in this large and under-served industry."
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