Paul Bagnell

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The long-anticipated initial public offering of Telus International (Cda) Inc. is finally complete, with shares surging after hitting the open market Wednesday in Toronto and New York.

The more heavily traded listing on the New York Stock Exchange rose more than 30 per cent in an opening trade at US$33.10, compared to the IPO price of US$25 -- the high end of a range Telus Corp. identified during a recent road show. That strongly suggests strong institutional demand for the stock, and a belief that the business can keep growing.

Jeff Puritt, Telus International’s chief executive officer, said that its growth will not be in the form of moving away from its partnerships with the Canadian telecom firm.

“It seems unlikely to me,” Puritt said in an interview on Wednesday. “One of the nice things about a dual-share structure, it doesn’t unduly restrict our M&A ambitions, because there’s little-to-no dilution as a consequence of doing so.”

“We’ve enjoyed a highly symbiotic relationship with Telus since our inception and we anticipate that it will continue throughout the future.”

Telus International has quietly grown from a provider of customer contact-centre services for other companies, to a big, diverse digital services company that provides an ever-growing list of services to more than 600 clients, including marquee names like Google, Uber, and TikTok. Those services now include things like app development, fraud protection, social media monitoring and chat-bots. 

In its final prospectus, the company said it posted 17 per cent revenue growth in the first nine months of 2020, and plans to keep growing through acquisitions, new clients and deeper relationships with existing clients. Puritt said in the interview that he believes the IPO will allow Telus international to become “an acquirer of choice” in the future.

One key acquisition is still pending. Telus International is waiting for U.S. regulators to sign of on its acquisition of Lionbridge AI, a company that specializes in artificial intelligence learning by “tagging” data with information that helps AI systems to better understand the flows of data they take in. The regulators extended their review by a further 45 days, but Telus International has told investors it believes the deal with receive approval without conditions.

Telus Corp. will retain voting control over Telus International through its ownership of multi-voting shares.

Analysts believe Telus will eventually also seek IPOs for two other businesses it owns: Telus Health and Telus Agriculture.

“Eventually, yes,”  said Canaccord Genuity Analyst Aravinda Galappatthige about additional spinoffs. “But that is a fair distance away. Certainly not in 2021 and likely not even 2022.”