After spinning it off in a frothy 2021 IPO market, Telus (T) is looking to re-absorb Telus International (TIXT) for a skinny 15% premium - in a $550M deal that looks accretive on an EBITDA basis.

The deal isn’t all that surprising, given Telus already owns nearly 60% of TIXT and accounts for a quarter of its revenue.

The offer values the IT business at just over $1B - not much higher than the ~$900M paid to it annually from Telus and small enough to not impact the leverage profile.

With TIXT shares closing above the offer, the market expects a competing bid or a sweetener - but if Telus can get this over the line it’s a near-term win. The long-term implications are muddier, as investors are unlikely to forget the 90% drawdown that preceded this transaction…

… which could impact the price tag on future spin offs, Telus Health in particular.