Manitoba Telecom Services (MTS) today announced the impending sale of its Allstream business in an all cash deal worth $465 million.
The subsidiary, which provides fire-optic infrastructure across the country and connectivity solutions to enterprise clients, will be sold to Zayo Holdings Inc, a fibre-optic provider based in Boulder, Colorado that has a market capitalization of about $5.7 billion and is traded on the New York Stock Exchange. The deal, which has already been approved by MTS’s board of directors, is expected to close sometime in 2016, pending government approvals.
This new agreement comes more than two years after a deal MTS had in place to sell Allstream to Egyptian-based Accelero Capital Inc. for $520 million fell through due to the Canadian government rejecting it over national security concerns. This is the same deal that led Naguib Sawiris, one the men responsible for bringing Wind Mobile here, to say he was “finished with Canada.”
“This transaction is the outcome of a comprehensive process which left no stone unturned,” said Jay Forbes, the president and CEO of MTS. “We engaged with a variety of potential strategic and financial buyers in a very orderly process. We believe this transaction maximizes the value of a stabilized and renewed Allstream, is in the best interests of the Company, and positions both MTS and Allstream for long term success in a competitive telecom marketplace.”