Canadian payments company Nuvei has made history with the most valuable technology IPO ever in TSX

Canadian payments company Nuvei has made history with the most valuable technology IPO ever in TSX

Shares in payment processing company Nuvei Corp. Trading on the Toronto Stock Exchange on Thursday, it raised $ 700 million in the largest technology company’s initial public offering in TSX history.

Founded in Montreal, Nuvei is a payment processing company with nearly 800 employees and nearly 50,000 customers who in the year through the end of June processed more than $ 35 billion in transactions across the company’s network. A large portion of its clients are in the fast-growing world of sports betting.

Earlier this month, the company announced that it plans to sell 26 million shares of TSX, at a price of between $ 20 and $ 22 per lot. But strong demand for stocks allowed the company to price its shares higher on Wednesday, at $ 26 per share.

The bid is valued at more than $ 700 million, which is enough to make the company the largest initial public offering (or IPO) for a tech company by dollar value in TSX history – more than the initial public offerings of BlackBerry and Shopify were due at the time.

When trading in stocks opened to institutional investors at TSX on Thursday, they jumped nearly $ 45 a share, according to Bloomberg data.

Shopify recently became the most valuable company in Canada, after passing on Royal Bank. At last count, Shopify was worth $ 136 billion, but when it went public in 2015, the company only raised about $ 130 million in an IPO.

BlackBerry, then known as Research in Motion, raised $ 100 million in its 1997 initial public offering. Eight years later, RIM was the most valuable company in Canada, valued at nearly $ 67 billion at its peak.

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Nuvei was valued at $ 2 billion last December when it raised $ 270 million from private investors, including the Quebec pension scheme, Caisse de dépôt et placement du Québec.

The company generated $ 245 million in revenue last year but lost $ 69.5 million after deducting expenses, according to organizational files.

The shares of so-called FAANG tech companies – Facebook, Apple, Amazon, Netflix and Google – caught fire during the pandemic. (Michael Nagel / Bloomberg)

The Nuvei IPO comes with a buzz about investing in the technology sector as many companies in the industry have proven resilient and have seen business surges amid the COVID-19 pandemic.

Shares in Netflix, Amazon, Google, Facebook, Apple and other tech names made huge gains during the pandemic, as millions of people stuck in their homes caused an increase in demand for online services.

Firms like Nuvei are eager to reach the market to capitalize on investor demand for technology stocks.

According to analyst Stephanie Price of CIBC, 23 tech companies went public between June and August, raising $ 9.4 billion in the process. On Wednesday, US market watchers were excited as software company Snowflake announced an initial public offering, and immediately saw its share price double on the first day of trading.

Nearly 95 percent of all IPOs in North America this summer were tech companies, and there’s more to come.

“The recovery in technology names is a good sign for private technology companies that have plans to publicly list their shares in the coming weeks,” Price said in a note to clients.

As of the end of August, there were 211 tech companies listed on both the TSX and TSX Venture Exchange, with a total value of $ 289 billion.

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