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Globe and Mail
a day ago
- Business
- Globe and Mail
Telus fails to deliver on Entwistle's IPO-based growth strategy
Would anyone buy another initial public offering promoted by long-serving Telus Corp. T-T chief executive officer Darren Entwistle? If the answer to that question is no, Mr. Entwistle's growth strategy at Telus is dead in the water. And it's hard to imagine investors stepping up for future Telus spinoffs after Tuesday's announcement that the parent company wants to put troubled offspring Telus International (Cda) Inc. TIXT-T out of its public market misery. Telus is offering to buy out shareholders in its subsidiary at a steep 86-per-cent discount to the price of its IPO, done with considerable fanfare just four years ago. Mr. Entwistle, a dominating personality who has been at the helm for 25 years, built Telus beyond its legacy phone networks by investing billions in subsidiaries focused on digital customer services, health care and agriculture. The idea was to incubate these businesses inside the Vancouver-based telecom, then launch them as public companies, with Telus shareholders reaping rewards from the value created on Mr. Entwistle's watch. Telus International – rebranded in 2024 as Telus Digital Experience – was meant to be the first in a series of spinoffs. Telus Health is up next, with an IPO anticipated as early as 2026. The incubator concept initially looked like a winner, as Telus Digital went public in 2021 at US$25 per share in what the parent company proudly heralded as the largest tech IPO in Toronto Stock Exchange history. At the time, Telus Digital's US$8.5-billion market capitalization rivalled that of the parent telecom. Execution failed to match ambition. Telus Digital proved a case study in value destruction. The company's challenges include a core business that runs call centres for clients such as retailers, hotels and banks. Artificial intelligence-based systems now dominate this space. Telus Digital proved slow to pivot, and customers moved on. On Wednesday, Telus reversed field by making a 'non-binding indication of interest,' or IOI, to acquire the 42.6 per cent of Telus Digital shares it doesn't own for US$3.40 each. Telus Digital shares promptly jumped 24 per cent Thursday to close at US$3.67 on expectations the parent company will be forced to goose its bid to get a deal done. Mr. Entwistle put a brave face on Telus Digital's face plant. In announcing the IOI, he said reintegrating the unit's tech expertise will benefit all of Telus's businesses, including telecom. While that may be true, buying back the subsidiary is an admission of failure. Telus set lofty goals for its diversification strategy, then failed to hit them. Telus proposes buying back Telus Digital for more than US$400-million Telus Health prepares to stand alone after years of acquisitions 'Today's rather dismal proposal has no 'congratulatory' terms that were to be found at the time of the IPO,' said analyst Tyler Tebbs at Tebbs Capital in a report. He said Telus is only offering to repurchase its subsidiary after failing to find a buyer for the business. Memories are long in financial circles. Mr. Tebbs compared the Telus offer to the ill-fated M&A at Time Warner Inc. in the recent past. He said the buyback 'is yet another example of a telecom/media company reversing a transaction done in much better times at the expense of shareholders.' In public markets, you're only as good as your last deal. Fund mangers got caught up in a craze for all things digital during the early days of the pandemic. That dynamic set the stage for a successful IPO at Telus Digital. The second time around, institutional and retail investors will be far more skeptical about buying when Mr. Entwistle is selling. To get an IPO done at Telus Health or Telus Agriculture, the parent company will likely be forced to accept a steep discount to the underlying value of the business, which defeats the purpose of the incubator concept. Yet without the ability to exit investments, Mr. Entwistle is running a debt-heavy conglomerate, anchored by a well-run but slow-growth telecom network that qualifies as critical infrastructure for the Canadian economy. Outside of founder-run businesses, it's hard to name a domestic public company more identified with its CEO than Telus. At Telus Digital, Mr. Entwistle's IPO-based growth strategy failed to deliver. The Telus board, chaired by former deputy prime minister John Manley, needs to ask hard questions about what comes next and who is best positioned to lead a business that has become the vision of a single executive.
Yahoo
19-03-2025
- Health
- Yahoo
New downtown Toronto clinic may be future of primary care
A new health clinic in downtown Toronto may be the future model of primary healthcare. The Telus Health MyCare Union clinic, a publicly-funded medical centre with no out-of-pocket fees, offers traditional in-person care with a technological twist: the option of virtual appointments via video on patients' phones. The clinic is accepting thousands of new patients from the city as well as people who are employed downtown but travel long distances for work. There are plans for future expansion in a city where approximately half a million residents don't have a family physician. Dr. Alissia Valentinis, Telus Health's senior medical director, said this model could and should be the future of primary care in Ontario. 'When we started this clinic, our goal of course was to help increase accessibility and care to many Ontario and Toronto patients as we could,' she said. 'But we also wanted to ensure we started off on the right foot with our physicians, make sure that we were setting up an environment for them to be able to thrive and not get burnt out so that they can continue to enjoy doing the work of practicing family medicine.' According to the Ontario Medical Association (OMA), family doctors spend 19 hours a week on administrative tasks, including four hours writing notes or completing forms for patients. Dr. Valentinis said that work has been cut down by the use of technology. Doctors at the clinic can use AI Scribe, an artificial intelligence program that summarizes medical notes from real-time conversations between physicians and patients. 'The physician can actually just focus on the patient and watch the patient and not have to keep (their) eyes on the computer. Our physicians have said this has been revolutionary for them in terms of alleviating a lot of the administrative burden.' Startup trying to boost foot traffic in downtown Toronto one step at a time Toronto's homelessness crisis 'completely out of control:' Advocates Across the province, the numbers are dire when it comes to residents without a primary care physician. The OMA says there are at least 2.5 million people not attached to a family doctor. They warn that number may climb to 4.4 million in a year due to retirements and changing careers. However, in late January, Sylvia Jones, Ontario's deputy premier and health minister, announced $1.4 billion in new funding to connect more than two million residents with a family doctor or primary care team within the next four years. The province had earlier earmarked more than $400 million in funding for primary care. Since opening in July 2024 when unused office space was converted into a medical facility inside the Telus building on York St. near Scotiabank Arena, Dr. Valentinis said the clinic has already accepted 3,807 new patients as of last week and has room for at least 2,200 more. Six physicians are currently employed at the clinic and growing their practices, she said, adding Telus Health is working to expand by adding more doctors to the clinic. For Dr. Valentinis, new patients have been 'overwhelmingly positive' about the clinic's accessibility and flexibility. 'Many of the patients that we are seeing have been waiting for years on various wait lists, have been going to walk-in clinics or emergency rooms to get their health care. They are so grateful to have their very own family physician.' Several months after opening, Dr. Valentinis said a large number of patients have been referrals. 'Friends, family, grandparents, children of current patients that are just raving about having their own family doctor.'
