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Telus International Inc. soared in its public market debut on Wednesday after boosting the size of its initial public offering and pricing its stock at the top of its planned IPO range, making it the latest tech company to receive a warm reception from investors.

The 15-year-old company, which provides outsourced online customer service for brands such as Fitbit Inc., Uber Technologies Inc. and online gamer Zynga Inc., began trading on the Toronto Stock Exchange and the New York Stock Exchange, opening at US$33.10 – above its IPO price of US$25 a share. It finished the day at US$30.40. The Vancouver-based company, an offspring of Telus Communications Inc., plans to use its public listing in an expansion strategy that includes paying for future acquisitions by issuing stock.

Telus International kicked off a roadshow last week to market its IPO. At the time, the company said it was expecting to price its shares at US$23 to US$25, and to offer 33.33 million subordinate voting shares, including 21.93 million from its treasury and 11.40 million from its owners, Telus and Baring Private Equity Asia.

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After strong interest from institutional shareholders on both sides of the border, the company boosted the offering to 37 million shares priced at US$25.

“Given there’s not a lot of tech services businesses in Canada, we anticipated greater interest south of the border,” Telus International’s chief executive officer, Jeff Puritt, said in an interview on Wednesday. Domestic demand for the IPO was stronger than expected, leading to “fairly balanced interest from both U.S. and Canadian investors,” he said.

Telus International expects to raise $627-million, or US$490-million, which it will use to pay down debt. The public offering will also help it make acquisitions and attract talent, Mr. Puritt said.

The company, which began as a call centre operator for Telus and a handful of U.S. telecom and technology firms, has expanded into services such as moderating content online, developing and supporting mobile apps and building virtual assistants such as chatbots. It serves companies in five key industries: technology and gaming, communications and media, e-commerce and fintech, travel and hospitality, and health care.

Late last year, Telus International got into the data annotation business through a $1.2-billion acquisition of Lionbridge AI, which is based in Waltham, Mass. The company labels data such as pictures, text, video and audio so that they can be used to develop artificial-intelligence algorithms.

Mr. Puritt said Telus International plans to focus on growing organically, for instance, by marketing its new data annotation services to existing customers, and on integrating its recent purchases, including Lionbridge and content moderator Competence Call Center, which it bought for $1.3-billion in 2019. But the company also plans to grow through acquisitions, he said.

Although the IT services industry is growing quickly, Telus International faces stiff competition from rivals, according to its prospectus. As well, its costs could rise if governments demand that its data annotators be classified as employees rather than independent contractors. The company has more than 50,000 employees, and uses hundreds of thousands of contractors.

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The classification of workers in the so-called gig economy – which includes drivers for ride-hailing services such as Uber and Lyft – has come to the forefront amid concerns that such individuals lack employee protections. However, California recently passed an initiative that classifies app-based drivers as independent contractors.

“The recognition that a shared economy and a virtual work force is legitimate and efficient was obviously regarded by our business, Lionbridge AI, favourably,” Mr. Puritt said. While risks remain – the gig economy debate continues in other states and countries – Mr. Puritt said they are manageable. “Those implications will affect everybody in this industry, not just us,” he added.

Telus will maintain control over its subsidiary through ownership of multiple-voting shares that each cast 10 votes, while public investors will own subordinated voting shares with one vote each. Mr. Puritt said Telus put the dual-share structure in place to retain a degree of control in an offspring it relies on for essential services – Telus International recently struck a 10-year contract with its parent. Two classes of shares are relatively common in tech companies that have gone public in recent years, with founders of Shopify Inc., Facebook Inc. and Google parent Alphabet Inc. using the structure to maintain control as new shares are issued.

The IPO is expected to be the first of several spinouts by Vancouver-based Telus. Analysts predict the next to go public could be the Telus Health division – which provides electronic medical records, virtual care and other digital health-care services. The Telus Agriculture division, which is in the agricultural technology industry, could follow a similar growth trajectory, expanding organically and through acquisitions before going public.

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