Telus to Acquire Remaining Stake in Digital Unit for $539 Million, Boosting AI Capabilities

Telus to buy remaining digital unit stake for $539 million

Sept 2 (Reuters) - Telus (T.TO), opens new tab said on Tuesday it would buy the remaining shares in its digital services unit in a $539 million cash-and-stock deal, as the Canadian telecom company looks to expand its artificial intelligence capabilities. The company has offered $4.50 per share to buy the Telus Digital (TIXT.TO), opens new tab shares it does not own and take the unit private. The deal has a total transaction value of about $2.9 billion, the companies said. Telus is taking full ownership of its digital services unit, which offers IT services, to better integrate the subsidiary's AI and software capabilities. The digital unit's shareholders will get an option to either get $4.50 in cash, 0.273 Telus share, or half of each in cash and stock. The option for stock is capped at 25% of the total consideration and any excess paid in cash, Telus said. On a U.S. dollar basis, the offer is 52% above Telus Digital's unaffected closing price of $2.96 on June 11, Telus said. The price is also 32% higher than Telus' initial $3.40 proposal on June 11. The Canadian telecom company currently holds about 86.9% of Telus Digital's voting power. Telus Digital's independent special committee unanimously recommended the new deal and its board approved it, the companies said. The deal is expected to close in the fourth-quarter of this year. Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo Our Standards: The Thomson Reuters Trust Principles., opens new tab

Telus to Take Full Control of Telus Digital in $539 Million Deal

Telus is set to acquire the shares of Telus Digital it doesn't already own for $539 million, a move to fold the former Telus International unit's artificial-intelligence and software-as-a-service capabilities into its core businesses. The Vancouver, British Columbia-based telecom company said it struck a definitive agreement to buy all the outstanding multiple and subordinate voting shares of Telus Digital for $4.50 apiece, a 52% premium to the stock's price before Telus first floated an offer in June. The equity purchase values Telus Digital at about $1.3 billion. "The transaction is fully reflective of our belief that closer operational proximity between Telus and Telus Digital will enable enhanced AI capabilities and SaaS transformation across all lines of our business," Chief Executive Darren Entwistle said. Telus Digital, spun out in a 2021 initial public offering as Telus International, provides customer-experience and information-technology services apart from Telus' core telecommunications arm. The parent company currently holds 92.5% of its multiple voting shares and 6% of its subordinate voting shares, representing 57.4% of its equity and nearly 87% of the voting power. The deal, which is expected to close in the fourth quarter, comes as Telus Digital's New York-traded stock has slipped about 3% for the year through Friday, when it closed at $3.88. Write to Adriano Marchese at [email protected]