Telus Corp. is buying control of a German business-services company in a $1.3-billion deal to bulk up its international unit, which the Canadian telecom company says it plans to take public.
The acquisition of Berlin’s Competence Call Center will add 8,500 employees and expand Telus’s presence in the content-moderation business, which involves monitoring websites, forums and social-media platforms on behalf of corporate clients and removing hateful messages or other unseemly content.
Vancouver-based Telus is going in with two other partners on the deal: senior management of CCC and Baring Private Equity Asia. The deal is subject to regulatory approvals; if it closes, Telus International will have 50,000 employees and annual revenues of $1.75-billion.
Telus International, which also sells call centre, IT and other services to businesses, is making plans for an initial public offering in the next 12 to 24 months, said its president and CEO, Jeffrey Puritt. An IPO would give the business its own valuation, helping to provide capital for future acquisitions and fueling growth, Mr. Puritt said.
“[Business-service providers] trade at different multiples than traditional telecom companies," he said.
At the moment, Telus Corp. owns about 65 per cent of Telus International, with the rest owned by Baring. That figure would fall to 62 per cent after the German deal.
Competence Call Center has offices in 11 countries across Europe and serves customers in the technology, travel and hospitality, communications services and media industries.
The acquisition is the largest in Telus International’s history, said Jill Schnarr, vice-president of communications at Telus, and gives the company greater scale in content moderation.
The acquisition of Competence Call Center follows Telus’s purchase of ADT Security Services Inc. in October. The telecom company paid $700-million in cash for the home-security business, its second acquisition in the industry in as many years. Telus bought the Western Canadian operations of AlarmForce Industries in early 2018.
Telus chief executive Darren Entwistle has previously said that he wants to grow Telus International into a multibillion-dollar business. The division would generate about $400-million in earnings before interest, taxes, depreciation and amortization this year if CCC’s earnings were included, the company said.
“Today’s announcement adds significant scale and diversity to Telus International – an important and differentiated growth driver for Telus – and increases substantially the organization’s estimated enterprise value to approximately $5-billion,” Mr. Entwistle said in a statement.
“Given the proliferation of fake accounts, spam, hate speech and inappropriate content that should be removed from the internet, we are incredibly excited to focus on doing this very valuable work through this particular acquisition,” said Ms. Schnarr.
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