Telus enters definitive deal to acquire Telus Int'l

Executive Summary

• Telus Corp. has entered into a definitive agreement to acquire the remaining outstanding shares of Telus Digital (Telus International (Cda) Inc.) for $4.50 (U.S.) per share, representing an aggregate consideration of $539-million (U.S.).
• The transaction values Telus Digital’s total equity at approximately $1.3-billion (U.S.) and the total transaction value at approximately $2.9-billion (U.S.), reflecting a 52.0% premium over the unaffected closing price on June 11, 2025.
• The deal is supported by Telus Digital’s board and special committee, with key minority shareholder EQT and all directors/officers agreeing to vote in favor. Completion is expected in Q4 2025, subject to shareholder and regulatory approvals.

Key Details

• Transaction Structure: Telus will acquire all outstanding multiple voting and subordinate voting shares of Telus Digital not already owned by Telus.
• Consideration: $4.50 (U.S.) per share, payable at shareholders' election via:
  • (i) $4.50 (U.S.) in cash;
  • (ii) 0.273 of a Telus common share; or
  • (iii) A combination of $2.25 (U.S.) in cash and 0.136 of a Telus common share.
• Proration: Shareholders electing share-based consideration (ii or iii) are subject to proration such that no more than 25% of the aggregate consideration is paid in Telus common shares.
• Valuation & Premiums:
  • Represents a 52.0% premium over the unaffected closing price of $2.96 (U.S.) on June 11, 2025.
  • Represents a 62.6% premium over the 30-day volume-weighted average price.
  • Represents a 32.4% increase from Telus's initial non-binding proposal of $3.40 (U.S.) on June 11, 2025.
  • Represents a 16.0% premium over the closing price on Aug. 29, 2025.
• Total Transaction Value: Approximately $2.9-billion (U.S.), based on ~114.3 million subordinate voting shares and ~164.4 million multiple voting shares.
• Telus Ownership: Telus currently owns ~6.0% of subordinate voting shares and ~92.5% of multiple voting shares (86.9% of total voting power). Post-closing, Telus will own 100% of Telus Digital.
• Shareholder Support:
  • EQT (largest minority shareholder, ~31.0% of subordinate voting shares) has agreed to convert multiple voting shares to subordinate voting shares and vote in favor.
  • All Telus Digital directors and officers (~3.2% of subordinate voting shares) have agreed to vote in favor.
• Financial Advisers & Valuation:
  • BMO Capital Markets provided a formal valuation of fair market value between $3.60 (U.S.) and $4.70 (U.S.) per share as of Sept. 1, 2025.
  • BofA Securities provided a fairness opinion to the special committee.
• Approvals & Conditions:
  • Requires approval of at least two-thirds of votes cast by holders of subordinate and multiple voting shares (voting as a single class) at a special meeting on Oct. 27, 2025.
  • Requires simple majority of votes cast by subordinate voting shares (excluding Telus and affiliates) under MI 61-101.
  • Requires court approval and regulatory approvals (including stock exchange and foreign direct investment laws).
  • No due diligence or financing conditions.
• Timeline:
  • Special Meeting: Oct. 27, 2025.
  • Record Date: Sept. 12, 2025.
  • Expected Closing: Q4 2025.
  • Outside Date: Jan. 2, 2026 (extendable for regulatory approvals).
• Post-Closing Status: Telus Digital shares will be delisted from the NYSE and TSX and will cease to be a reporting issuer in Canada.
• Break Fees: No break fees payable. Telus agrees to reimburse Telus Digital expenses up to $10-million (U.S.) if terminated under certain circumstances; Telus Digital agrees to reimburse Telus up to $10-million (U.S.) if the board changes recommendation and shareholders do not approve.

Notable Quotes

• Darren Entwistle, President and CEO of Telus: "Telus Digital's world-leading capabilities in digital customer experience solutions and AI innovations are highly complementary to our strategy at Telus... 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... driving positive outcomes for the customers we serve on a global basis."
• Josh Blair, Co-chair of the Special Committee of Telus Digital: "Following careful consideration of a wide range of factors and negotiations with Telus that resulted in an increase in the price first offered by Telus to minority shareholders of Telus Digital... the special committee determined that the transaction is in the best interests of Telus Digital and fair to its minority shareholders."
• Olin Anton, Telus Digital Special Committee Co-chair: "The transaction provides immediate and attractive value and liquidity for our shareholders who elect to receive cash and an opportunity for Telus Digital shareholders who elect to receive Telus shares to continue participating in the growth of the business... We believe the transaction positions Telus Digital to enhance its ability to deliver innovative solutions and invest in new capabilities in a highly competitive and increasingly concentrated market environment."