Nuvei Could Be in Play To Be Taken Private by Advent International

Montreal-based Nuvei Corp. early Monday issued a statement confirming it has received interest from potential investors and has created a “special committee” of independent directors to review “expressions of interest” regarding offers to take the company private, as well as other “strategic alternatives.”

Private-equity firm Advent International Corp. is making a bid to purchase payments provider Nuvei, according to a Wall Street Journal article that appeared over the weekend. Closing Friday at $21.76, Nuvei’s shares have dropped more than 80% from their September 2021 high.

Nuvei’s acknowledgment that is weighing offers from investors comes a little more than a year after the company acquired Atlanta-based processor Paya Holdings Inc. for $1.3 billion, a move some investors have since questioned.

In its statement, Nuvei added it is engaged in “discussions with certain third parties in connection with a potential transaction involving continued significant ownership by certain of the holders of multiple voting shares, including Phil Fayer, Nuvei’s founder, chairman, and chief executive.”

Nuvei says no decision has been made whether to pursue a deal to take the company private or maintain the status quo.

Advent has previously invested in payments companies. Last year, it acquired payments-software provider myPOS for $542 million. Advent also has ties to another payments-software vendor, Xplor Technologies, as well as to payment processor Worldpay and other payments companies. FIS Inc. earlier this year spun off a 55% interest in Worldpay.

In a research note, Christopher Kennedy, an equity research analyst for William Blair, says a key point of differentiation for Nuvei lies in its “highly flexible technology platform, global focus, product set, and customer service,” and adds that he expects Nuvei to continue to benefit from the growth of e-commerce.

“Nuvei generates roughly 90% of volume from e-commerce/mobile commerce, and has increasingly diversified into additional verticals (e.g., general e-commerce, B2B, platforms),” Kennedy says in his note that Nuvei maintains a small share of its total addressable market, which he sizes at some $50 trillion in payment volume.

Key risks facing Nuvei’s business include “the overall macro environment, potential economic shutdowns from the pandemic that could lead to a reduction in sports events, internal execution, M&A integration, and competition,” Kennedy adds.