Visa, Inc.(Ipo Paper) by Didier Buka

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IPO Paper

Visa Inc. (VN) operates the world’s largest retail electronic payments network and manages the world’s most recognized global financial services brand. Visa has more branded credit and debit cards in circulation, more transactions and greater total volume than any of their competitors. They facilitate global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. They provide financial institutions, their primary customers, with product platforms encompassing consumer credit, debit, prepaid and commercial payments. Visa Net, their secure, centralized, global processing platform, enables them to provide financial institutions and merchants with a wide range of product platforms, transaction processing and related value-added services. Based on the size of their network, the strength of the Visa brand and the breadth and depth of their products and services, they believe they are the leading electronic payments company in the world. Visa operates in the global payments industry, which is undergoing a major shift from paper-based payments, such as cash and checks, to card-based and other electronic payments. This shift has driven significant growth in card-based payments globally. According to The Nilson Report, global card purchase transactions grew at a compound annual growth rate, or CAGR, of 14% over the period from 2000 to 2006. The Nilson Report forecasts global card purchase transactions to increase at a CAGR of 11% from 2006 to 2012, with particularly strong growth in Asia/Pacific, Latin America and Middle East/Africa Visa Inc. was incorporated as a Delaware stock corporation in May 2007 and the Visa global enterprise was reorganized in October 2007. Prior to the reorganization, Visa operated as five corporate entities related by ownership and membership. Major Stock Holders prior to Offering:

Bank of America Corporation
Citigroup Inc
JPMorgan Chase & Co
National City Corporation
U. S. Bancorp
They created a multi-class structure in order to:
Allow stockholder decisions generally to be made by, and a majority of their board of directors to consist of independent directors elected by, their class A stockholders and not by their financial institution customers that hold their class B and class C common stock; and •Implement a key principle of the retrospective responsibility plan, which is that liability for certain litigation, which they refer to as the covered litigation, would remain with the members of Visa U.S.A., as holders of their class B common stock through adjustments to the conversion rate for such stock. Currently, no public market exists for their class A common stock. They have applied to list their class A common stock on the New York Stock Exchange under the symbol “V.” Their shares of class B and class C common stock are held by their financial institution customers, generally carry no voting rights, will not be listed and are subject to transfer restrictions. See “Description of Capital Stock.” A portion of their class B and class C common stock is subject to mandatory redemption pursuant to their amended and restated certificate of incorporation. They intend to redeem 123,216,659 shares of class B common stock and 143,037,934 shares of class C In March 2008, they completed their Initial Public Offering, or IPO. As a result of their IPO, the financial institutions that hold their class B and class C common stock represent a minority of the outstanding shareholder interest of Visa Inc. Giving effect to these redemptions, the number of shares outstanding and the number of shares of class A common stock issuable upon conversion of the class B and class C common stock immediately following this offering would be 406,000,000 shares of class A common stock. Option to purchase additional shares: 40,600,000 shares of class A common stock Common stock outstanding...
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