Nuvei CEO Phil Fayer on the perils of running a public tech company—and why he’s taking it private

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A US$6.3-billion private equity takeover of the Montreal online payments company has been approved by shareholders

Nuvei CEO Phil Fayer on the perils of running a public tech company—and why he’s taking it privatelisted publicly during a wave of 20 technology initial public offerings on the Toronto Stock Exchange in the 2020-21 COVID-19 tech bubble. The Montreal online payments company raised US$805-million in

On the good side, it helped establish our brand and our capability, and that momentum and visibility was additive. On the downside, people worked their butts off and they have done so many amazing things over the last four years and the numbers come out and you see violent stock reactions and that’s a mood killer, retention killer, morale killer.From a business perspective, it was somewhat irrelevant. We attracted the same short twice for a variety of reasons.

We spent weeks speaking to all our top shareholders. We engaged with all stakeholders. We had one-on-ones with every customer. It was an enormous distraction. You end up doing damage control, managing your employee base, working with the board for them to make independent assessments on what is happening. Thankfully, in our case, we managed it well.We received inbound interest from a group I know well. Advent is a top-five private equity firm with deep experience in payments.

Is it a loss for the public market? Maybe. But it will continue its journey. The public market evaluated us the way it thought was appropriate. We think we can do better as a private company.We’re private-equity backed. That means they’re here to drive a return and there will be a liquidity event in the future. That could be multiple scenarios, from a recapitalization to a strategic acquisition or a public listing. It’s so far away it would be hard to comment.

As a business, you need to manage expectations, to speak with the street as closely as possible. Your guidance needs to be thoughtful and you need to have consistent, predictable growth. All those things are areas that we could have done better as a public company. What we’re seeing here is similar to what’s happening south of the border from a valuation perspective. Because we’re a smaller market, we end up having smaller companies go public and that’s when it gets dangerous as volatility is extreme.

 

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