Net proceeds to support strategic growth investments at TELUS and debt retirement
TELUS Corporation , a leading communications and information technology company, announced the sale of its financial solutions business to Dye & Durham, a leading provider of cloud-based software and technology solutions designed to improve efficiency and increase productivity for the legal community, business professionals, governments and financial institutions. The transaction closing date is today, December 6, 2021.
“As a long-standing, trusted partner to leading financial institutions across Canada, our team has provided the financial community with robust solutions that help them leverage technology to transform and advance their core business through digitization,” said Darren Entwistle, President and CEO of TELUS. “Dye & Durham shares our commitment to delivering customer service excellence, as demonstrated by its expansive and loyal client base. When combined with the company’s passion for human capital development and employee engagement, we are confident that this is the right organization to support our team members and the ongoing transformation of the financial services industry for many years to come.”
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Net proceeds from the transaction will be used to support strategic growth investments including connecting more homes and businesses to our leading PureFibre network, advancing our 5G network build and investments to support enhancing new areas of growth including our offerings to small and medium sized businesses, as well as in TELUS Health and TELUS Agriculture. Proceeds will also support debt retirement. TELUS will provide operational transition services to Dye & Durham for up to 24 months following closing to ensure a smooth transition of operations.
TELUS and Dye & Durham have entered into an arrangement pursuant to which TELUS will be the preferred communications partner and TELUS International a preferred technology partner for Dye & Durham. Importantly, this arrangement will create additional opportunities for the benefit of both parties to deliver a variety of value-added and next-generation digital technology services across the small and medium business market, bolstering the ability for Canadian businesses to thrive in our digital economy.
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With its leading infrastructure and technology solutions, combined with its customers first focused team and deep history of collaboration with financial communities, TELUS’ financial solutions business and its team members will enhance Dye & Durham’s portfolio of leading cloud-based solutions servicing global clients across legal, corporate, government, and financial industries with a focus on digitizing small business’ processes. The financial solutions business complements Dye & Durham with their digital financial ecosystem with established solutions across payment processing, real estate technology and digital banking managed solutions serving well established customers within the financial services vertical.
TELUS’ annual consolidated financial targets for 2021 remain unchanged and consolidated financial results for 2021 are not expected to be materially impacted by the sale of the financial solutions business. The tax gain from the sale will be subject to an income tax payment, estimated to be approximately $65 million, to be paid in 2021. Our revised cash tax assumption for 2021 of $480 to $560 million, as updated in our third quarter 2021 earnings release dated November 5, 2021, is inclusive of this amount.
Scotiabank acted as a financial advisor to TELUS on the sale of the business