Accelero Capital Buys Allstream for $520 million

by Istvan Fekete on May 27, 2013

The Canadian wireless market landscape is changing. While wireless startups are struggling for survival, investment groups are eyeing the market and just waiting for the right moment to tap a wireless player in a market that appears to be more lucrative than imagined by most of us.

The most recent move comes from Accelero Capital Holdings, which tapped Manitoba Telecom Services’ enterprise telecommunications unit, Allstream, for $520 million. Accelero Capital has a strategic alliance with Orascom TMT Investments, a company chaired by Mr. Naguib Sawiris. His name will sound familiar to many, as he was Wind Mobile’s former financial backer.

Allstream, headquartered in Toronto, Canada, currently employs over 2,000 personnel. What was interesting for Accelero is that Allstream has about 30,000 route kilometers of fibre network coverage across Canada and currently serves more than 50,000 businesses.

Naguib Sawiris commented: “This investment reflects Accelero’s long-term commitment to the Canadian telecommunications market, and out belief in the opportunity that exists to provide capital to enhance the competitive landscape in Canada. Allstream is the leading competitor to the incumbents in the Canadian enterprise market, and a fast-growing player in the IP space with an advanced coast-to-coast fiber network.”

Commenting on the acquisition, Dean Prevost, President of Allstream, said, “We are delighted to work with Accelero to realize Allstream’s full potential and deliver on our core mission to provide world-class products and services to Canada’s business community. I am confident that with Accelero as a strategic shareholder, and with the benefits of being a totally focused and privately held company, Allstream can build on this momentum for the benefit of our customers, employees and the competitiveness of the Canadian telecom sector.”

Turns out the Canadian wireless market is of more interest to Mr. Sawiris than he claims. Speaking with the Globe and Mail, the Egyptian businessman said he regretted his decision to invest in Canada. But this recent acquisition appears to contradict his earlier words.

Pierre Blouin, chief executive of MTS, sees this move as help for the company to move forward as a pure-play telecom player. It plans to use $130 million to make an additional contribution to the MTS pension plan and repay $70 million in short-term debt it incurred in February to meet its pension obligations.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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Ottawa Rejects MTS Allstream–Accelero Deal Due to Unspecified National Security Concerns —
October 8, 2013 at 5:47 am

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