CPI Card Group Secondary Offering Prices at $21.50 a Share

CPI Card Group’s secondary public offering has been priced at $21.50 a share, putting the gross value of the 2,337,323-share base sale at about $50.3 million before underwriting discounts and other offering expenses. The shares are being sold by stockholders affiliated with Parallel49 Equity, not by CPI itself.

The underwriters also received a 30-day option to buy as many as 350,598 additional shares from the selling stockholders at the public offering price, less the underwriting discount. If that option is exercised in full, the total number of shares sold would rise to 2,687,921. The offering is expected to close on or about September 14, subject to customary closing conditions.

Friday’s pricing followed the launch of the sale a day earlier. CPI maintains its company announcements through its investor-relations news channel. B. Riley Securities and D.A. Davidson & Co. are acting as joint book-running managers, while Lake Street Capital Markets is serving as co-manager.

Parallel49 could exit its remaining CPI position

The size of the underwriters’ option is particularly important because it matches the portion of Parallel49’s holdings left after the base sale. A preliminary prospectus supplement filed for the offering said the two selling Tricor Pacific Capital Partners Fund IV entities together owned 2,687,921 CPI shares before the sale, equal to about 23% of shares outstanding as of August 31.

Those funds are offering 2,337,323 shares initially. If only the base offering closes, they would retain 350,598 shares, leaving Parallel49 with roughly 3% of CPI. If the underwriters exercise the additional-share option in full, the filing says Parallel49 would no longer beneficially own CPI common stock.

That outcome would also have a governance consequence. CPI’s preliminary prospectus said Parallel49’s director-nomination rights would terminate if its remaining beneficial ownership is fully sold. The filing also said directors previously nominated by Parallel49 would continue serving on CPI’s board after the offering, so an exit by the investment firm would not by itself remove those directors.

The sale continues a substantial reduction in Parallel49’s position over the past two years. A January 2026 ownership filing with the U.S. Securities and Exchange Commission reported 2,687,921 shares beneficially owned by Parallel49, or 23.6% of the class at that time. In December 2025, CPI said Parallel49 had reduced its position from about 42% to about 24% after selling shares to the Tricor Family Office and CPI Chairman H. Sanford Riley. Parallel49 originally invested in CPI in 2007 and still held nearly 60% of the company after CPI’s 2015 initial public offering.

Another existing holder could increase its stake as Parallel49 reduces its own. The preliminary prospectus said the Tricor Family Office, which already owned about 19% of CPI as of August 31, had indicated interest in buying approximately 550,000 shares in the offering. If it receives that full allocation, the filing said its position could rise to about 24%. The indication is nonbinding, so the final number could be higher, lower or zero.

CPI receives no proceeds and issues no new shares

The structure of the sale matters for existing investors. CPI is not issuing new common shares in the offering and will not receive any of the proceeds. The roughly $50.3 million of gross proceeds from the base sale will go to the selling stockholders before underwriting discounts and estimated offering expenses.

Because the shares already exist, the offering does not mechanically dilute the percentage ownership of other shareholders through the creation of additional stock. It can, however, change the ownership mix and the amount of stock available for public trading. CPI’s prospectus specifically warned that sales of substantial amounts of common stock, or the perception that additional sales could occur, may affect the market price and liquidity of the shares.

The preliminary prospectus listed 11,591,982 CPI shares outstanding as of August 31. Against that figure, the base offering represents about one-fifth of the company’s outstanding common stock, and the full 2,687,921 shares covered by the offering and option represent roughly 23%. That makes the sale material to the company’s ownership structure even though CPI is not raising capital itself.

The $21.50 offering price is also well below the $28.25 closing price that CPI’s preliminary prospectus reported for September 9, the day before the proposed sale was announced. The difference is about 24%. That comparison is a reference to the September 9 close disclosed in the filing, not a measure of the stock’s movement after the offering was announced.

The share sale comes after a stronger second quarter

The secondary offering is separate from CPI’s operating finances, but it arrives shortly after the company reported improved second-quarter results. In its August earnings release filed with the SEC, CPI reported second-quarter revenue of $149.2 million, up 15% from a year earlier. Net income increased to $2.0 million from $0.5 million, while adjusted EBITDA rose 7% to $24.1 million.

For the first six months of 2026, revenue increased 17% to $296.3 million. CPI reported $42.1 million of cash generated from operating activities and $36.1 million of free cash flow for the period, compared with $9.9 million and $0.8 million, respectively, a year earlier. The company ended June with a net leverage ratio of 2.7 times and later redeemed $26.5 million of its senior notes in July.

CPI also raised parts of its 2026 outlook with those results. Management now expects high-single-digit to low-double-digit revenue growth and free cash flow of $45 million to $50 million, while maintaining its forecast for low-to-mid single-digit adjusted EBITDA growth and a year-end net leverage ratio between 2.5 and 3.0 times.

Those figures provide useful separation between the company’s business performance and the current stock sale. The offering is a liquidity event for existing Parallel49-affiliated holders rather than a financing that adds cash to CPI’s balance sheet. The next immediate milestone is the expected September 14 closing, followed by the 30-day period in which the underwriters can exercise their option for the remaining 350,598 shares.