Canadian cellco Public Mobile was yesterday sold to Canadian investment firm Thomvest Seed Capital and US private equity firm Cartesian Capital for an undisclosed price. The CDMA2000-based mobile operator, which launched services in May 2010 and covers the Toronto and Montreal areas, was sold by a consortium of US and Canadian private equity firms. Thomvest and Cartesian indicated that they aim to fund Public Mobile’s bid for 4G wireless spectrum in an upcoming auction set for January 2014, and are also looking at a merger with one or more of Public’s rivals, particularly Wind Mobile and Mobilicity. The latter’s proposed takeover by larger operator Telus was blocked by a federal decision earlier this week, prompting Wind’s founder Anthony Lacavera to propose an altenative takeover bid from Wind in an attempt to create a fourth national player in the Canadian market. Public Mobile’s new owners echoed this sentiment yesterday, with Stefan Clulow, managing director of Thomvest, announcing: ‘Circumstances in the Canadian wireless industry have created a window for Canada’s fourth wireless player to emerge.’ Paul Pizzani, a Cartesian partner, added: ‘Public Mobile is well-positioned to grow in scale by pursuing these consolidation opportunities and by bidding for national spectrum in the 700MHz auction.’ As reported by Bloomberg, Thomvest and Cartesian said that they have invested the first part of funds committed to make Public Mobile cash-flow positive, without giving a figure. Thomvest becomes the carrier’s controlling shareholder, they added. The investors also said that the transaction ‘received the continuing support and partnership’ of Chinese network equipment and device provider ZTE and the Export-Import Bank of China, without elaborating. Thomvest is backed by Peter Thomson, chairman of Woodbridge Co, the Thomson family investment company which has a 55% stake in New York-based news group Thomson Reuters.
Reuters yesterday quoted Alek Krstajic, CEO of Public Mobile, as supporting the new owners’ consolidation ambitions, although not necessarily in the capacity of purchaser. ‘We see ourselves having a place in consolidation, it’s not clear who the consolidator is yet,’ he said in an interview, adding: ‘The consolidator will be one who brings the money.’ Krstajic also welcomed Ottawa’s ruling to block the Telus-Wind bid and its decision to delay the 700MHz auction to January, arguing that the move gives newer market entrants time to discuss consolidation. ‘It would be lunacy for us to bid against the other new entrants.’ The CEO added that Thomvest’s and Cartesian’s support will lead to Public expanding its subscriber base, which is currently estimated to stand at over 300,000.