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TELUS Agrees to Acquire Mobilicity for $380 Million

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The writing was on the wall for Mobilicity (formally known as Data & Audio-Visual Enterprises Holdings Inc.) and today TELUS announced it has agreed to acquire the wireless upstart for $380 million, which would bring an additional 250,000 customers over to the incumbent:

TELUS 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.

Of course, this agreement is still subject to conditions and approval from the Competition Bureau, Industry Canada, and Mobilicity’s debt holders. Industry Minister Christian Paradis said Ottawa will take the time required to review the acquisition proposal:

“Our government has taken significant action to promote competition in the wireless sector,” he said. “The government will take the time required to review the proposal carefully.”

 

According to Stewart Lyons, Mobilicity President, he says “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,”

William Aziz, Mobilicity Chief Restructuring Officer, said “Mobilicity has been losing a significant amount of money every month.” and the acquisition by TELUS looks to be the best alternative for the company. The $380 million purchase price will be used to address 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 approved, TELUS would retain all 150 Mobilicity employees who would have the chance to review and secure long term roles with TELUS.

TELUS was first rumoured to be in talks to acquire Mobilicity in mid-April, with sources at the time quoting a valuation of $350-$400 million for the deal. The latter gained court approval for restructuring last month, leading many to believe it was reading itself for a sale. Well, looks like that all turned out to be true.

 

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  • Jesse

    I’m curious to see what they would do with the exiting customers if this goes through… If there plan is only good in the unlimited zones which will probably happen 🙁 either way I am going to go pick up a Mobilicity plan today I think as I was just in the states and got my iPhone swapped for one of the tweaked AWS models!

  • 1His_Nibs1

    This is a bleak day for Canadian consumers. If and I say IF Ottawa has any balls (which they don’t) they would nix this deal. Ottawa should also tell the Big 3 that when it comes to purchasing any competitor that they “need not apply”. This is seriously bad for competition and if the Mobilicity sale is approved, Ottawa (for all it’s bluster about wanting to “create” competition in the wireless industry) will be viewed by me and many other Canadians as talking out of it’s ass!

  • MiguelSmith

    Would you rather just have them go bankrupt and stop providing service? It’s clear they’re bleeding money…it’s either get saved and STAY in the industry, or disappear…

  • FragilityG4

    Guess who loses again?

  • 1His_Nibs1

    Sounds like you work for either Mobilicity OR Telus. Telus owned or disappear………not a hard choice imo.

  • jack

    Mobilicity is not bleeding nor going bankrupt if you’ve read their earnings reports. They just aren’t allow to grow bigger with the new spectrum. It is indeed a sad day in the Canadian mobile industry.

  • Biggy604

    We will never see low data prices now, and with WIND also up for grabs. I dont see any low prices or competitve pricing anymore ad the Big 3 really has nothing at all to worry about.

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