Nuvei’s shares appreciated 32% during the first trading session of the week after the Montreal fintech indicated that it was examining strategic solutions and was in talks for a possible transaction.
The management of the payment solutions provider confirmed late Sunday evening that it had received proposals after fueling speculation over the weekend. A special committee evaluates expressions of interest and strategic alternatives.
Private investment firm Advent International of Boston, Mass., is in advanced talks with Nuvei, according to the Wall Street Journal reported over the weekend.
An Advent spokesperson simply indicated to The PressMonday, which the American investment firm did not wish to comment on.
It would not be surprising if many contenders raised their hands, according to analyst John Davis of the Raymond James firm.
Among the potential strategic buyers, he is thinking in particular of Global Payments and Fiserv, two American financial technology companies whose shares are listed on the New York Stock Exchange.
Worldpay, a payment processing solutions provider that recently passed control to a private Chicago investment firm, is another potential candidate for Nuvei, he said.
The chances of an agreement being announced are “more than likely,” says John Davis, in a note sent to his clients to start the week.
However, he specifies that an agreement with a private investment firm is much more likely than with a strategic player.
“Unless the expectations of management or the board are unrealistic, I consider it very likely that a deal will come to fruition in the relatively near future,” he says.
A feasible transaction, he said, can be anticipated at a price of US$36 per share, representing a 65% premium to Nuvei’s stock price at the close of trading on NASDAQ on Friday.
Nuvei shares closed at US$28.68 on Monday on the NASDAQ.
Nuvei management maintains that it is engaged in discussions with third parties regarding a possible transaction involving the maintenance of a significant participation of certain of the holders of shares with multiple voting rights, including the big boss Philip Fayer.
The Quebec investment firm Novacap and the Caisse de dépôt et placement du Québec are the two largest institutional shareholders of Nuvei. Novacap holds 40% of the shares with multiple voting rights, Philip Fayer owns 37%, while the rest belongs to the Caisse, i.e. 23%.
The disclosure of the strategic review at Nuvei comes a week after mdf commerce – another Quebec company in the technology sector – announced that it had accepted a buyout offer from New York investment giant Kohlberg Kravis Roberts & Co.