Telus IPO makes TSX history
The Canadian Press - Feb 03, 2021 - BC Biz

Photo: Contributed

TORONTO — Telus Corp.’s digital consulting subsidiary is striking out on its own, hoping to gain recognition from investors as the realm of customer service is increasingly dominated by chat bots and social media management.

Telus International’s public offering on Wednesday marks a long-awaited fork in the road for Telus Corp., which has tried to look beyond mobile phone and internet plans for new growth-making enterprise technology through Telus Health and Telus Agriculture.

“This transaction currency—our own publicly traded stock—is now something that Telus International can use to accelerate and amplify its own growth trajectory,” chief executive Jeff Puritt said.

Telus International no longer has to “to rely upon and draw away from Telus in order to fuel and support our growth,” he said, instead using the cash to fund everything from potential acquisitions to attracting and retaining talented staff.

For 15 years, Telus’ customer service consultants had been quietly helping more and more companies and adding new services like artificial intelligence and chat bots, while under the telecom giant’s umbrella. Puritt says the move to a standalone business will better help investors see its value relative to competitors.

Puritt says the spinoff will also, hopefully, help shareholders of Telus Corp., which still holds about 67% of the voting power in Telus International. Telus Corp. is also the biggest customer of Telus International’s customer service offerings, followed by Alphabet Inc.’s Google and an unnamed “leading social media company.”

The stock started trading on Wednesday on the New York Stock Exchange and the Toronto Stock Exchange under the ticker symbol “TIXT,” rising more than 30% on its first morning of trading in Toronto. The proceeds will make it the largest initial public offering of a technology company in the history of the Toronto Stock Exchange and among the 10 largest IPOs ever on the TSX.

Telus International priced the IPO at US$25 per share overnight following its roadshow with investors, and the 37 million share offering could bring in upwards of US$925 million for Telus International and its key shareholders, Telus Corp. and Baring Private Equity Asia. Telus International itself will gain about US$490 million from the IPO to repay debt.

Puritt says he’s confident the new corporate structure will help the company grow.

“I think you’re just unnecessarily circumscribing the opportunity to access a deeper, broader talent pool—and to access evermore interesting, challenging, complex technologies—if you insist that it all be within a single entity,” Puritt said.

“I think it’s actually better for customers, and better for Telus and Telus International, to have a more progressive approach to this.”

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