Telus to buy Mobilicity for $380-million
Mr. David Fuller reports
TELUS AGREES TO ACQUIRE MOBILICITY
Telus Corp. has entered into an agreement with Mobilicity to acquire the company for $380-million. If the deal receives the required approvals, it would ensure continued service to Mobilicity's 250,000 customers without the risk of disruption.
The agreement between TELUS and the company is subject to conditions including approval by the Competition Bureau, Industry Canada, and Mobilicity's debtholders. TELUS and Mobilicity have informed the government and regulators and both companies are fully committed to working cooperatively to secure timely approvals for the transaction.
"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," said Stewart Lyons, Mobilicity President. "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."
William Aziz, Mobilicity chief restructuring officer, continued, "Mobilicity has been losing a significant amount of money every 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."
The entire purchase price will be used to satisfy Mobilicity's secured and unsecured debt.
"We look forward to serving Mobilicity's customers and welcoming their employees to the TELUS team," said David Fuller, TELUS Chief Marketing Officer.
If this transaction is approved, TELUS will retain all 150 Mobilicity employees as it integrates the Mobilicity operation into TELUS over the coming months. The employees would have the opportunity to review and secure permanent, long term roles with TELUS.
TELUS has created 1,700 new jobs in Canada over the last two years alone while bringing 4G wireless coverage to 99 per cent of Canadians coast-to-coast.
Acquisition agreement details:
Mobilicity has begun proceedings in the Ontario Superior Court of Justice with a view to obtaining approval for a plan of arrangement under the Canadian Business Corporations Act. The plan of arrangement with TELUS requires an affirmative vote by debtholders, after which TELUS and Mobilicity will seek court approval of a transaction that will see Mobilicity emerge as a wholly-owned subsidiary of TELUS. TELUS has entered into support agreements with a significant number of Mobilicity's debtholders who have committed to vote for the plan of arrangement pursuant to the terms and conditions of the support agreements.
TELUS and Mobilicity anticipate an expeditious legal and regulatory review in view of the current circumstances Mobilicity is facing.
We seek Safe Harbor.