Less than four years after going public in what was the largest technology IPO ever on the Toronto Stock Exchange, Nuvei announces it will go private in a transaction which values the company at 6.3 billion US dollars.
The Montreal-based payment technology company, which secured an investment from Canadian actor Ryan Reynolds last year, announced Monday that it is closing its capital thanks to investment from American private equity firm Advent International.
The all-cash transaction values the company’s shares at US$34 and has already received the green light from existing Canadian shareholders, Nuvei CEO Philip Fayer, private equity firm Novacap and Caisse de dépôt et placement of Quebec (CDPQ).
Mr. Fayer, Novacap and CDPQ collectively represent approximately 92% of the voting rights attached to all shares.
Mr. Fayer will remain president and CEO of the company, the current management team will also remain in office and Montreal will still be the head office, Nuvei said in a press release.
Mr. Fayer will indirectly own or control approximately 24% of the resulting private company, while Novacap will own 18% and CDPQ will have a 12% stake.
According to the CEO, this agreement marks the start of an “exciting” new chapter for the company.
“We are pleased to partner with Advent to continue to meet the needs of our customers and employees, and to capitalize on the significant opportunities provided by this investment,” said Mr. Fayer.
The action rises markedly
The deal comes weeks after Nuvei announced it had formed a special committee to evaluate expressions of interest from potential buyers, amid media speculation the company was close to be privatized by Advent.
At that time, Nuvei confirmed that it was in discussions regarding a possible transaction involving the continued significant participation of certain holders of its multiple voting shares, including Mr Fayer.
When Nuvei confirmed the talks, its stock price listed on the Toronto Stock Exchange was around $31, but it has been climbing ever since, sitting at nearly $44 on Monday, when the deal was finalized. announcement.
Richard Tse, an analyst at the National Bank of Canada who had named Nuvei as a potential candidate for privatization in 2022, believes that the operation is “reasonably valued”.
He said he believes the potential for a competitive offer is low given the non-solicitation commitment from Nuvei and the significant “breakup fee” of 150 million.
Advent, founded in 1984, has completed more than 415 private placements in more than 40 countries and, as of September 30, had assets under management of US$91 billion.
The Company focuses on investments in business and financial services, healthcare, industrial, retail, consumer, leisure and technology.
Support for the development of Nuvei
Nuvei said it would benefit from the significant resources, operational and sector expertise, and investment capacity provided by Advent.
“The arrival of a partner with such extensive experience in the payments sector will continue to support our development,” argued Mr. Fayer.
The company’s development has included a partnership deal announced in January with software company Adobe to give customers access to its payments technology.
The deal with Adobe followed a partnership between Nuvei and Microsoft announced last year that will see the software company begin using Nuvei’s payments technology in the Middle East and Africa.
When Nuvei went public in September 2020, it set a goal of raising US$600 million. It was oversubscribed by 20%, then its 14 subscribers purchased more than four million shares using the stock options they had. The deal resulted in an IPO of US$833 million, breaking the TSX record for a technology IPO.
At the time, Mr. Fayer said the company “wasn’t in the business of breaking records” because its real goal was to reward its 800 employees with $100,000 in stock options. and build capital for future mergers and acquisitions.
The Nuvei Group that has taken shape over the past few years fits the profile of a differentiated global payments platform, said Bo Huang, chief executive officer of Advent.
“Our expertise and experience in the payments space allows us to be convinced of the opportunity to support Nuvei as it continues to grow from its base in Canada to become a global player in this space,” said he declared in a press release.
“We look forward to working closely with Nuvei to capitalize on emerging opportunities and help shape the future of the payments industry,” he said.
The deal with Advent, which requires shareholder and regulatory approval, is expected to be finalized in late 2024 or the first quarter of 2025.