Shaw Communications has agreed to acquire Mid-Bowline Group and its unit Wind Mobile for a total of CAD 1.6 billion. CEO Brad Shaw said the deal will boost Shaw’s offering by bringing in Wind’s 5 MHz of spectrum in Ontario, Alberta and British Columbia, as well and its mobile network. The CEO added that the next step will be to develop a converged wireline and wireless network.
“By acquiring Wind, we now have immediate scale, spectrum, retail distribution and a network with a clear path to LTE that complements our existing fibre and WiFi infrastructure,” he said.
Wind CEO Alek Krstajic and his team will remain with the company and continue to drive the mobile business. For 2015, Wind is expected to generate CAD 485 million in revenue and CAD 65 million in EBITDA.
To finance the deal, Shaw has executed a fully-committed bridge financing facility with the Toronto Dominion Bank and the Canadian Imperial Bank of Commerce. The transaction is subject to certain approvals, including those from the Competition Bureau and the Ministry of Innovation, Science & Economic Development (formerly Industry Canada) and court approval of the plan of arrangement.
Shareholders of Mid-Bowline have approved the transaction and closing is expected to take place in the third quarter of fiscal 2016.
Shaw previously considered building a mobile network after acquiring spectrum in the auction in 2008. However, in 2011 the company concluded it was too expensive to build a network from scratch and opted instead to roll out Wi-Fi services. It has since divested some of its spectrum holdings.
Wind Mobile entered the Canadian market in 2009, after obtaining spectrum in the 2008 auction. After initially facing difficulties due to local opposition to its foreign backers Orascom Telecom and then Vimpelcom, the operator's management, local operator Globalive and private equity funds took ownership in 2014. Wind counts almost 1 million subscribers, making it Canada's fourth-largest operator.
