Tom Paine
Shift4 Payments, an Allentown-based provider of POS systems for the hospitality industry (hotels & restaurants) that’s been around since the early 90’s under various names, filed for an IPO on Friday. The S-1 said Shift4 would make its offering for $100 million, though the website Renaissance Capital indicates this may just be a placeholder. In any event, its hard to tell how the market will rebound after Covid-19.
Shift4 Payments filed confidentially with the SEC back in December, before the pandemic reached the US according to reports..
For Q1 2020, Shift4 total revenue was up 29% to $199.4 million, and the company narrowed its net loss to $5.2 million from $13.5 million. The first quarter was impacted somewhat by Cobid-19 in March.
I don’t understand this market, and its segmentation, that well. The leaders appear to be MICROS (Oracle), Microsoft and NCR. I’ve also followed the journey of Heartland Payment Systems (acquired by Global Payments in 2016) and Sicom (acquired by Global Payments in 2019). Both of these companies were backed by LLR Partners at similar stages of growth.. JetPay, another Philadelphia-area company, was acquired by NCR. The obvious theme is consolidation, and most signs point towards Atlanta, where NCR and Global Payments are based.
“There’s just a tremendous amount of fragmentation that has thwarted innovation in hotel IT,” said Mike Webster, senior vice president and general manager, Oracle Retail and Oracle Hospitality, in 2017. “All these hotels are dabbling with these point solutions: I call it “shiny object syndrome,” or SOS — and I use SOS as an intentional pun. Because you know you’re in trouble if you think that’s what’s going to save your brand.”
In this uncertain environment, Shift4 may just be taking the car outside for a spin to. see who notices. Or it may IPO. We’ll see.
The company plans to list its Class A common shares on the New York Stock Exchange under the symbol “FOUR”.