By Nataly Kehyayan, Staff Writer
Telus International (TIXT) marks the biggest tech initial public offering (IPO) in terms of capital raised on the TSX with the IPO and the secondary offering forecasted to raise $925 million for the company. TIXT started trading at $25 per share, offering 37 million shares on Wednesday, February 3rd, 2021. Banks familiar with the matter have reported a high level of interest in both the Canadian and the US markets. Share prices rose above 30% on the first day of trading.
Telus International, a Telus Corporation subsidiary, is a digital customer experience/solutions provider that works with sister companies to offer products and services to businesses of all shapes and sizes, primarily focusing on larger customers who represent a significant portion of consumers. Some of their clients include Google, Tiktok, Airbnb, Zynga, and Zara. In terms of client base diversification, over the past few years, Telus International has reduced their revenue dependence on its top10 customers from 76% to 63%.
TIXT positions itself in a promising, high growth industry as the market analysis indicates a potential global compound annual growth rate of 17.7% for the upcoming years. The increased reliance on technology and solution-oriented services could be seen as a catalyst for this expansion and escalated demand.
According to the 2019 annual report released by Telus: “TELUS International continues to enhance its next-generation digital solutions, including artificial intelligence, robotic process automation, big data and analytics, in order to meet the digital transformation needs of fast-growing tech, fintech and financial services, games, travel and hospitality, telecom and healthcare industries”. TIXT also delivered “strong organic growth, driven by an expanding global customer base”. Telus reported a healthy increase in revenue and EBITDA for the then private subsidiary.
Telus Corp. still holds 67% of the voting power and CEO Jeff Puritt anticipates that the symbiotic relationship between the two (Telus and TIXT) entities will be maintained. The parent company has always actively sought to expand its services beyond the traditional telecommunications provider business prototype. This will likely not be the last of Telus’ subsidiaries going public as the market already expects Telus Health, and eventually Telus Agriculture to be next in line.