Nuvei fueled speculation over the weekend because the management of the Montreal provider of payment processing solutions would be on the verge of accepting a buyout offer from a private investment firm.
Advent International, of Boston, Massachusetts, is in advanced talks with Nuvei for a possible takeover, according to the Wall Street Journal reported over the weekend.
Few details were released, however, including the value of a possible transaction, and it was not immediately possible to obtain a comment on Sunday from Nuvei management.
With Nuvei’s stock down 15% so far in 2024 and nearly 50% over the past year, analyst Daniel Perlin at RBC considers it logical that a private investment fund would discuss with Nuvei.
The financial technology company’s stock closed Friday’s session at $29.48 on the Toronto Stock Exchange, giving it a value of just over $4 billion.
At its highest level in 2021 during the pandemic, Nuvei stock had reached a high of $180.
Too conservative forecasts
Investors poorly received management’s most recent comments at the beginning of March, during the presentation of year-end financial performance. It seems that the market was notably disappointed by forecasts considered too cautious.
In a note sent to clients on Sunday evening to respond to speculation surrounding Nuvei’s future, Daniel Perlin, however, emphasizes that management is slowly regaining investor confidence and has appropriately set its guidance for the 2024 financial year.
Nuvei is still led by its founder Philip Fayer. He is CEO and Chairman of the Board of Directors. He founded the company in 2003, but under the name Pivotal Payments at the time. The company grew rapidly and listed on the stock market in fall 2020.
PHOTO MARTIN CHAMBERLAND, LA PRESSE ARCHIVES
Philip Fayer in September 2023
According to public statements, the Quebec investment firm Novacap (with a 22% stake) and the Caisse de dépôt et placement du Québec (with approximately 13%) are the two largest institutional shareholders of Nuvei.
Philip Fayer, 46, owns some 28 million shares with multiple voting rights, the equivalent of 20% of the company’s outstanding shares.
Last September during a public conference organized in Montreal, Philip Fayer said that the context in the capital markets, and in particular in the technology sector, was extremely difficult. He was referring to the disinterest seen towards Nuvei and other fintech companies (fintech).
“It’s not the most pleasant time to be running a public company. Investors are hard to please. You are a zero today and a hero tomorrow. It comes and goes with the rhythm of a pendulum,” he said.
Last spring, Nuvei was “attacked” by New York short seller Spruce Point Capital for the second time in 16 months. Nuvei also announced last April that actor Ryan Reynolds had become a shareholder, marketing advisor and creator of video capsules for the company.
Nuvei’s solutions are used to process electronic payments in industries such as retail, travel and online gaming.