TELUS Agrees to Acquire Mobilicity for $380 Million
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.