TELUS unit prices upsized IPO

TELUS Corp. unit TELUS International (Cda) Inc. on Feb. 3 priced its upsized offering of 37 million subordinate voting shares at US$25 per share.

The offering is anticipated to provide TELUS International and its parent company, as well as Baring, with gross proceeds of US$925 million. If underwriters fully exercise their overallotment option, gross proceeds can reach US$1.06 billion, with expected net proceeds to TELUS International of about US$490 million.

TELUS International intends to use proceeds to repay outstanding borrowings under its revolving credit facilities. TELUS International will not receive proceeds from the shares of selling shareholders.

The subordinate voting shares in the IPO include 21 million from TELUS International treasury and 16 million from TELUS and Baring Private Equity Asia, the selling shareholders. The selling shareholders granted the underwriters a 30-day option to buy up to 5.55 million additional subordinate voting shares at the IPO price.

The shares are expected to begin trading on the NYSE and on the Toronto Stock Exchange under the ticker symbol TIXT on Feb. 3 and close Feb. 5, subject to customary closing conditions.

Following the offering, parent company TELUS is expected to hold about 67.8% of TELUS International's voting power and up to 57.1% of its economic interest. Baring is expected to have nearly 30.1% to 30.7% of TELUS International's voting power of and 25.4% of its economic interest.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are acting as joint lead bookrunning managers for the IPO, while Barclays Capital Inc., BofA Securities Inc. and CIBC World Markets Inc. are also acting as active bookrunning managers.

Other bookrunning managers include Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, RBC Dominion Securities Inc., Robert W. Baird & Co. Inc., BMO Nesbitt Burns Inc., Scotia Capital Inc., TD Securities Inc., Wells Fargo Securities LLC and William Blair & Co. LLC.

Meanwhile, MUFG Securities Americas Inc., National Bank Financial Inc., Loop Capital Markets LLC and R. Seelaus & Co. LLC are acting as co-managers.