Telus signs deal to buy Mobilicity
TORONTO – Telus (TSX:T) is prepared to pay off Mobilicity debtholders, hire its employees and provide service to the small wireless carrier’s 250,000 customers in a deal announced Thursday.
The Vancouver-based telecom company’s offer of $380 million is subject to conditions including approval by the Competition Bureau, Industry Canada, and Mobilicity’s debtholders.
“A concern for our customers and employees led us to approach Telus, which has a reputation for a strong customer focus, as evidenced by their industry leading client loyalty,” Mobilicity president Stewart Lyons said in a statement.
“I am confident Telus will look after our employees and our customers, mitigating any disruption to their service, while offering the best outcome for all stakeholders.”
If the deal is approved, Telus says it will keep all 150 Mobilicity employees and integrate them into its operations.
Mobilicity was part of a new wave of small wireless companies launched after the last wireless spectrum auction in Canada to challenge Telus, Rogers and Bell.
However, the company, which has been losing money, launched a restructuring plan last month.
“The financial strength of Telus will allow the business to be continued in a way that will benefit customers and employees. An acquisition by Telus is the best alternative for Mobilicity,” William Aziz, Mobilicity’s chief restructuring officer.
The companies say the entire purchase price will be used to satisfy Mobilicity’s secured and unsecured debt.
Formerly known as Data & Audio-Visual Enterprises Wireless Inc., Mobilicity offers wireless services in Toronto, Ottawa, Calgary, Edmonton and Vancouver.
The deal for Mobilicity came amid speculation that all of the new wireless companies launched after the last spectrum auction may be sold.
Dutch owner VimpelCom has put Wind Mobile up for sale, opening up the possibility that a bigger company could swoop in and pick it up and it has been reported that Public Mobile has hired an investment banker to find a buyer.
© The Canadian Press, 2013