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Montreal payment processing company Nuvei Corp. revealed Tuesday it plans to raise at least US$600-million in its initial public offering, setting a price range of US$20 to US$22 per subordinate voting share as it kicked off marketing efforts for the deal.

But investors who buy in will get a tiny voting interest in the company, Nuvei said in a regulatory filing.

Nuvei hasn’t yet finalized how many subordinate voting shares it will sell, but anticipates once it is public on the Toronto Stock Exchange that there will be 35.7 million to 40 million subordinate voting shares, carrying one vote each.

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Its three existing shareholders – chief executive Philip Fayer, private equity firm Novacap and the Caisse de dépôt et placement du Québec – will have a combined 91.8 million multiple voting shares, with 10 votes apiece. That means subordinate stockholders will own a combined 28 per cent to 30 per cent economic interest with less than 4.2 per cent of voting rights.

However, according to the terms of the offering, if any of the three prior owners ever sell, their shares would convert to subordinate stock. If any of the sellers' remaining multiple voting shares fall to less than five per cent of that class of stock, the remaining holdings would become single-vote shares as well.

Novacap is the likeliest to sell down its stake, as private equity firms typically exit investments within a set period. Novacap is already selling 3.57 million of its multiple voting shares in the offering.

The proposed IPO would value Nuvei at US$2.6-billion to US$2.9-billion at closing. The offering is being underwritten by 14 investment banks, led by Goldman Sachs, Credit Suisse, BMO Nesbitt Burns and RBC Dominion Securities. They stand to collectively earn more than $28-million in fees.

Nuvei, which provides payment-processing technology for online and in-store transactions, will begin trading in a hot market for tech stocks. Shares of legal-software company Dye & Durham Ltd. and online-learning-software provider Docebo Inc. have soared since their IPOs within the past year, while the S&P/TSX Information Technology Index closed last week up 38.5 per cent so far this year, led by Canadian commerce software giant Shopify Inc., Canada’s most valuable company.

Investor enthusiasm for tech stocks has prompted other domestic software companies to consider going public, including Kitchener online-learning provider D2L Corp. and Montreal telemedicine startup Dialogue Technolgoies Inc., which have both met with investment bankers in the past month to explore the option.

Nuvei, founded by Mr. Fayer in 2003, grew steadily to become one of Canada’s largest private financial-technology companies, backed by Quebec heavyweights the Caisse and Novacap. That firm invested an additional $358-million into the company last December, in what was believed to be the largest private direct investment into a Canadian tech company.

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Nuvei has 765 employees, with 194 based in Montreal. About 50,000 merchants around the world use its payment systems across a wide range of industries, including online retail, online gambling and financial services, according to its prospectus. The company generated revenue of US$245.8-million in 2019 and a net loss of US$69.5-million.

Alongside organic growth, Nuvei is looking to expand through acquisitions. Last summer, it nearly doubled its size with a US$872.5-million acquisition of London Stock Exchange-listed payments-services provider SafeCharge International Group Ltd. It’s also in the process of buying a Dutch company called Smart2Pay for about €221.5-million ($345-million).

Like many other digital technology companies, Nuvei appears to have benefited from the impact of COVID-19, which has prompted people to spend more time and money online. “We believe the COVID-19 crisis will act as a catalyst in further accelerating mobile commerce and e-commerce transactions as consumers adapt to a ‘new normal’ (including the decline in use of cash) and as merchants shift to contactless and mobile payments to ensure business continuity,” the company said in its prospectus.

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