Advent International to acquire Canada’s Nuvei for $6.3 billion in a cash deal

Private equity firm Advent International has reached an agreement to acquire Canada's Nuvei in a cash transaction valued at $6.3 billion, marking a move for the payments technology company, which counts actor Ryan Reynolds among its backers.

The acquisition, announced on Monday, signals Nuvei's transition to private ownership after four years of being publicly listed on the Toronto Stock Exchange. Prior to the emergence of acquisition talks in mid-March, Nuvei's stock had experienced a decline of nearly 15 per cent this year. The company's shares are also traded on the Nasdaq.

At a price of $34 per share, Advent's offer represents a 56 per cent premium to Nuvei's last Nasdaq closing price before reports of a potential acquisition surfaced.

This acquisition positions Nuvei as one of the notable take-private deals amidst a period of subdued private equity activity. Philip Fayer, the current CEO, will continue to lead Nuvei, which will maintain its headquarters in Montreal.

Nuvei specialises in providing payment technology solutions to businesses, facilitating transactions regardless of customers' location or preferred payment method.

Following the completion of the deal, existing shareholders including Fayer, private equity firm Novacap, and Canadian pension fund CDPQ are anticipated to collectively own or control approximately 24 per cent, 18 per cent, and 12 per cent of the equity in the private entity.

The pandemic propelled growth in payment processors as consumers increasingly adopted digital payment methods; however, some have encountered challenges sustaining growth amid heightened competition and inflationary pressures.

Several fintech companies, grappling with subdued public market valuations, may view privatisation as a means to streamline costs and sidestep the quarterly reporting obligations associated with public listing.

Analysts at William Blair foresee ongoing consolidation in the payments and fintech sectors, driven by large markets and favourable long-term trends combined with comparatively lower valuations.

The transaction is slated to conclude in late 2024 or the first quarter of 2025. Advent International, boasting $91 billion in assets under management as of September 30, has previously made notable investments in the payments industry, including Brazil's Ebanx and the UK's Planet.

(With Reuters inputs)