On Tuesday, Seaport Global Securities adjusted its stance on Nuvei Corp. (NASDAQ:NVEI), downgrading the company's stock from Buy to Neutral with a new price target of $34, up from the previous $29. This change follows the announcement that Nuvei has agreed to be acquired by private equity firm Advent International.
Nuvei, based in Montreal, confirmed today that it will be taken private by Advent International, a notable entity in the Fintech private equity space. The acquisition is set to be finalized between late 2024 and the first quarter of 2025. Despite the change in ownership, Philip Fayer is slated to continue in his role as Chair and CEO of Nuvei.
The terms of the deal indicate an offer of $34 per share in cash for Nuvei, which places the enterprise value (EV) of the company at approximately $6.3 billion. This offer represents a 56% premium over Nuvei's closing share price as of March 15, 2024, which was the last trading day before media speculation about a potential deal surfaced.
Seaport Global Securities regards the acquisition as a positive development for Nuvei, suggesting that the company will benefit from the opportunity to grow its global footprint without the scrutiny associated with public markets. The deal is also seen as indicative of a broader trend in the Fintech sector, where small to mid-cap high-growth companies like Nuvei are attractive acquisition targets at premiums compared to their public market valuations. The firm anticipates more transactions of a similar nature in the future.
InvestingPro Insights
As Nuvei Corp. transitions into a new chapter with its acquisition by Advent International, real-time data from InvestingPro provides a nuanced perspective on the company's financial health and stock performance. Nuvei's market capitalization stands at $4.52 billion, reflecting its substantial presence in the fintech sector. The company has experienced impressive revenue growth, with a 41.1% increase over the last twelve months as of Q4 2023, demonstrating its robust business model and market expansion efforts.
InvestingPro Tips highlight that while Nuvei has not been profitable over the last twelve months, analysts are optimistic about the company's potential to grow its net income this year. Despite some analysts revising their earnings downwards for the upcoming period, the stock has shown strong returns, with a 121.57% price uptick over the last six months and a 23.15% increase over the last month. This volatility in stock price movements suggests that investors see potential value in the company's future, especially in light of the acquisition news.
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