TELUS Acquires Full Ownership of TELUS Digital for $539mln

TELUS Corp. announced a deal to acquire full ownership of TELUS Digital for $539 million, or $4.50 per share. The acquisition is expected to enhance AI capabilities and SaaS transformation across TELUS' business lines, including telecommunications, health, and agriculture. The independent Special Committee of TELUS Digital recommended shareholders vote in favor of the arrangement. TELUS Digital is currently trading down 0.45% on the NYSE.

TELUS Corp. (TSX: T, NYSE: TU) has announced a definitive agreement to acquire all outstanding shares of TELUS Digital (NYSE & TSX: TIXT) not already owned by TELUS for US$539 million, or $4.50 per share. The deal, which is expected to close in the fourth quarter, aims to enhance artificial intelligence (AI) capabilities and software-as-a-service (SaaS) transformation across TELUS' business lines, including telecommunications, health, and agriculture.

The Vancouver, British Columbia-based telecom company has agreed 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. TELUS 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.

Chief Executive Darren Entwistle stated, "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." 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 acquisition comes as TELUS Digital's New York-traded stock has slipped about 3% for the year through Friday, when it closed at $3.88. The deal has received the unanimous recommendation of a special committee of independent members of the board of directors of TELUS Digital and the unanimous approval of TELUS Digital’s Board of Directors. The special committee determined that the transaction is in the best interests of TELUS Digital and fair to its minority shareholders.

The transaction values TELUS Digital’s equity at approximately US$1.3 billion, based on approximately 114.3 million outstanding subordinate voting shares and 164.4 million outstanding multiple voting shares, for a total transaction value of approximately US$2.9 billion. TELUS currently owns approximately 6.0% of the outstanding subordinate voting shares and 92.5% of the outstanding multiple voting shares of TELUS Digital, collectively representing approximately 86.9% of the outstanding voting power of the TELUS Digital shares.

The price of $4.50 per share represents a 52.0% premium over TELUS Digital’s unaffected closing price of $2.96 per subordinate voting share on the New York Stock Exchange (NYSE) on June 11, 2025, the last trading day prior to TELUS’ announcement on June 12, 2025 of its initial proposal. The price also represents a 62.6% premium over the 30-day volume-weighted unaffected average price of TELUS Digital subordinate voting shares on the NYSE prior to June 12, 2025.

References:
[1] https://www.marketscreener.com/news/telus-to-take-full-control-of-telus-digital-in-539-million-deal-ce7c50d3df8af42c
[2] https://www.marketwatch.com/story/telus-to-take-full-control-of-telus-digital-in-539m-deal-afd0ae0e
[3] https://www.businesswire.com/news/home/20250902024297/en/TELUS-and-TELUS-Digital-Enter-into-a-Definitive-Arrangement-Agreement-for-TELUS-to-Acquire-Full-Ownership-of-TELUS-Digital