Nuvei (TSX:NVEI) stock saw its share price surgeby 31.82% between March 15 and March 18. The rapid rise in its shares came after news came out that the company might be going private through a buyout deal.
The $5.48 billion market capitalization point-of-sale and payment processing company headquartered in Montreal did not say it is finalizing a deal yet. Rather, it let the world know that it is fielding an offer from a private equity firm and is open to fielding offers.
While current and prospective investors await an announcement about a deal, what should they think about this development? Today, we will discuss what is happening surrounding the potential buyout deal and whether it might make sense to invest in its shares before it happens.
The announcement
On Saturday, March 16, a Wall Street Journal report mentioned that Advent International, a Boston-based private equity firm, is in advanced talks with Nuvei regarding a buyout.
On Saturday, March 18, Globe and Mail reporter Sean Silcoff wrote that Nuvei “is engaged with discussions with certain third parties in connection with a potential transaction involving continued significant ownership by certain of the holders of multiple voting shares.” Todd Coupland, a top analyst from CIBC, believes that the deal could happen quite soon.
Nuvei stock responded to the reports to confirm the rumours. However, the company also said it is in talks to ensure that holders of multiple voting shares retain ownership. Despite being in advanced talks, the company clarified that it is not close to entering an agreement yet.
The clarification means that the current deal that Nuvei is entertaining might fall apart, but the POS company is open to fielding more offers if this deal does not go through.
When can we expect a deal to be made?
With the rumours confirmed, an announcement on whether there is a successful deal with Advent International might come soon. The firm has appointed a special committee to evaluate the “expressions of interest” to identify whether the deal might be suitable for the company.
Coupland believes that the market still undervalues the POS firm compared to its peers. He noted that the chief executive officer of Nuvei, Philip Fayer, has discussed the possibility of a buyout over the last two years.
Foolish takeaway
After such a positive response that saw its share prices surge significantly, Nuvei might feel tempted to continue advanced talks and entertain more offers. It is important to note that despite the recent uptick, Nuvei stock trades at a 33.92% discount from its 52-week high valuation.
The drop in its valuation can be partially attributed to macroeconomic jitters. However, a short-seller report by Spruce Point Capital Management regarding Nuvei’s “questionable” US$1.3 billion acquisition of Paya Holdings in 2023 also contributed to the downturn in its share prices.
The company itself has recently entered a strategic partnership with Adobe for payment technologyaccess. This follows a similar deal with Microsoftlast year. With the development still new, investors might want to keep a close eye on analyst opinions regarding whether it might be a good buy in light of the buyout situation.
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Shareholders will receive US$34.00 per share in cash, which represents a premium of approximately 56% over Nuvei's unaffected closing share price of US$21.76 on the Nasdaq Global Select Market on March 15, 2024, and a premium of approximately 48% over Nuvei's 90-day volume weighted average trading price as of such date ...
MONTREAL — Nuvei Corp. shareholders have voted overwhelmingly in favour of a plan that will see the company bought by an American private-equity firm and taken private at a US$6.3-billion valuation.
The first thing Nuvei investors should understand is to keep holding on to the stock until the deal goes through. When the stock is delisted from the market, investors will receive about $46.9 (based on the current USD to CAD conversion rates) per share, which is slightly higher than the current $44.3 per share.
The highest analyst price target is C$45.86 ,the lowest forecast is C$45.86. The average price target represents 1.95% Increase from the current price of C$44.98. Nuvei Corp's analyst rating consensus is a Hold. This is based on the ratings of 1 Wall Streets Analysts.
Following completion of the transaction, it is expected that the Shares will be delisted from each of the Toronto Stock Exchange and the Nasdaq and that Nuvei will cease to be a reporting issuer in all applicable Canadian jurisdictions and will deregister the Shares with the U.S. Securities and Exchange Commission (the ...
Generally, the stock price of the target company tends to rise because the acquiring company usually pays a premium over the target company's current market value to incentivize shareholders to agree to the deal.
Ryan Reynolds-backed Canadian payment processing company Nuvei (NVEI) is being acquired and taken private by private equity firm Advent International, the companies announced Monday.
As for Nuvei, the move makes sense because even though the company has been profitable for some time now, it carries a sizable amount of debt, and while its organic growth has been reasonable enough, the company was facing challenges in the current high-inflation environment.
Based on short-term price targets offered by 12 analysts, the average price target for Nuvei Corporation comes to $32.33. The forecasts range from a low of $27.00 to a high of $34.00. The average price target represents a decline of 2.71% from the last closing price of $33.23.
On average, Wall Street analysts predict that Nuvei's share price could fall to $32.82 by May 8, 2025. The average Nuvei stock price prediction forecasts a potential downside of 1.33% from the current NVEI share price of $33.26.
The drop in its valuation can be partially attributed to macroeconomic jitters. However, a short-seller report by Spruce Point Capital Management regarding Nuvei's “questionable” US$1.3 billion acquisition of Paya Holdings in 2023 also contributed to the downturn in its share prices.
Private equity firm Advent International has agreed to buy Canada's Nuvei in an all-cash deal that values the Ryan Reynolds-backed payments technology firm at $6.3 billion. The deal, announced on Monday, will take Nuvei private four years after it was listed on the Toronto Stock Exchange.
Shareholders will receive US$34.00 per share in cash, which represents a premium of approximately 56% over Nuvei's unaffected closing share price of US$21.76 on the Nasdaq Global Select Market on March 15, 2024 , and a premium of approximately 48% over Nuvei's 90-day volume weighted average trading price as of such ...
Despite its solid performance, the company has lost around 32% of its stock value since reporting its first-quarter performance. Concerns over global growth amid prolonged higher interest rates appear to have dragged the NVEI stock price down.
The firm may take your fractional share and bundle it together with others until it has a whole share to sell, or it may resell your fractional share to someone else who wants it. Some companies may buy your fractional share directly, but only if you sell all of your shares in the company at once.
Based on short-term price targets offered by 12 analysts, the average price target for Nuvei Corporation comes to $32.33. The forecasts range from a low of $27.00 to a high of $34.00. The average price target represents a decline of 2.71% from the last closing price of $33.23.
A drop in price to zero means the investor loses his or her entire investment: a return of -100%. To summarize, yes, a stock can lose its entire value. However, depending on the investor's position, the drop to worthlessness can be either good (short positions) or bad (long positions).
If it's an “all-cash” deal, your shares will vanish from your portfolio upon closing, replaced by the specified cash value. Conversely, if it's an “all-stock” deal, your shares will be swapped for shares of the acquiring company.
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