Advent International, a private equity firm, is currently in advanced discussions to acquire Nuvei, a Canadian payments technology company. According to a source familiar with the matter, the deal, which has not been officially announced yet, could be revealed soon. However, there is a possibility that the negotiations may not result in a final agreement. The terms of the proposed deal have not been disclosed as of now. If the acquisition goes through, it would be considered a significant take-private deal in a time when private equity transactions have slowed down.
This potential buyout by Advent International would be the second major deal involving a company backed by actor Ryan Reynolds in the past year. In March last year, T-Mobile purchased Ka’ena Corp, the owner of Mint Mobile, a budget wireless provider co-owned by Reynolds. The transaction was valued at around $1.35 billion. It is evident that Ryan Reynolds has shown interest in investing in technology companies, and his involvement could bring attention to Nuvei’s operations and potential growth.
Nuvei’s shares have experienced a decline following the acquisition of Paya Holdings for $1.3 billion last year. This move received criticism from short seller Spruce Point Capital Management LLC, who alleged that the acquisition was negatively impacting Nuvei’s business due to Paya’s declining market share prior to the takeover. Although Spruce Point eventually closed its short position as Nuvei’s stock price fell, the company has had to navigate challenges in maintaining its market position and shareholder confidence.
Nuvei, a provider of technology services for transaction processing, went public in September 2020, raising $700 million in what was the largest technology company offering on the Toronto Stock Exchange at the time. The company boasts a diverse client base that includes prominent names such as General Motors, Microsoft, and Shein, operating in over 200 markets globally. Despite its strong foundation, Nuvei has faced competition and market pressures, leading to a decline in its stock value over time.
The financial services sector has seen increased deal activity in recent months, with notable acquisitions such as Capital One’s agreement to acquire Discover Financial for $35.3 billion. Shift4, a payments processor with a market value exceeding $6 billion, is also reportedly in talks for a potential acquisition by companies like Fiserv. The COVID-19 pandemic accelerated the adoption of digital payment methods, benefiting companies like Nuvei and Shift4 initially. However, challenges related to competition and inflation have impacted their growth trajectory.
Nuvei’s stock prices have significantly declined from their peak in 2021, with Toronto-listed shares trading at just over C$29 and New York-listed shares at $21.76. The company is currently facing pressure to demonstrate its ability to achieve sustainable growth and innovation in a competitive market environment. The potential acquisition by Advent International could provide Nuvei with the resources and strategic direction needed to address these challenges and capitalize on future opportunities in the payments technology sector.