Bulletin: Telus Corp.'s Lionbridge AI Acquisition Should Support Telus International IPO In 2021

TORONTO (S&P Global Ratings) Nov. 6, 2020--S&P Global Ratings today said it views Telus Corp.'s (BBB+/Negative/A-2) Nov. 6, announcement that it is acquiring Lionbridge AI through TELUS International (TI) for approximately C$1.2 billion (about US$935 million) as credit neutral to the rating. Even though the acquisition will expand TI's capabilities, we expect it will also add about 0.15x of additional leverage, bringing the adjusted debt-to-EBITDA ratio above our downside threshold of 3.25x. The acquisition, which will likely close on Dec. 31, 2020, is expected to be funded through debt (at the TI level) and equity from Telus and funds affiliated with Baring Private Equity Asia. Assuming a one-third equity and two-thirds debt financing, and with S&P Global Ratings fully consolidating

...November 6, 2020 TORONTO (S&P Global Ratings) Nov. 6, 2020--S&P Global Ratings today said it views Telus Corp.'s (###+/Negative/A-2) Nov. 6, announcement that it is acquiring Lionbridge AI through TELUS International (TI) for approximately C$1.2 billion (about US$935 million) as credit neutral to the rating. Even though the acquisition will expand TI's capabilities, we expect it will also add about 0.15x of additional leverage, bringing the adjusted debt-to-EBITDA ratio above our downside threshold of 3.25x. The acquisition, which will likely close on Dec. 31, 2020, is expected to be funded through debt (at the TI level) and equity from Telus and funds affiliated with Baring Private Equity Asia. Assuming a one-third equity and two-thirds debt financing, and with S&P Global Ratings fully consolidating TI operations and debt, we forecast pro forma leverage to be approximately 3.4x. Telus management has reiterated its desire to pursue an IPO of TI in the first quarter of 2021. The extent of...

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