TELUS to acquire Mobilicity and its 250,000 subs for $380 million

This is turn of events, but also expected.

In a press release today TELUS announced that they’ve entered into an agreement to acquire Mobilicity for $380 million. Of course, the deal is pending the “required approvals” from authorities (Competition Bureau, Industry Canada, and Mobilicity’s debtholders). “The purchase price received would be applied to repay all of the outstanding first and second lien debt of Mobilicity, with the remainder being used to repay certain outstanding unsecured debt securities issued by Mobilicity.”

With this news it was revealed that the new entrant, which is a private company, had amassed 250,000 subscribers. As for Mobilicity employees, “If this transaction is approved, TELUS will retain all 150 Mobilicity employees as it integrates the Mobilicity operation into TELUS over the coming months.”

TELUS and Mobilicity both stated that they “anticipate an expeditious legal and regulatory review in view of the current circumstances Mobilicity is facing.” Basically they are quickly bleeding money. In the court filings the TELUS/Mobilicity acquisition looks to be heading for a closing date by June 10, 2013. If the agreement has not been completed by this date, TELUS must pay Mobilicity a deposit of $10,000,000. This reason for this date is so that Mobilicity can still participate in the upcoming 700Mhz spectrum auction. June 11th is the last date the carriers can drop down their deposits to secure their bidding spot.

Mobilicity launched their wireless service in 2010 and currently operates in Vancouver, Toronto, Ottawa, Edmonton and Calgary.

Update: If keeping track of subscriber numbers is your thing. TELUS reported Q1 2013 results of 7.7 million subsBell reported 7,672,075 (include Bell Aliant into the numbers and you reach 7,815,475). If/when the TELUS/Mobilicity deal closes this will add 250,000 subscribers to TELUS’ base, securely placing them as the 2nd largest Canadian carrier, just behind Rogers at 9,376,000 wireless subscribers.

Source: CNW
Via: Mobilicty (PDF)