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Shaw to acquire Wind Mobile for CAD1.6bn

17 Dec 2015

Canadian cableco Shaw Communications has agreed to acquire a 100% interest in cellco Wind Mobile for approximately CAD1.6 billion (USD1.163 billion). The takeover, if completed, would be the first foray into the mobile sector for Shaw, which vies closely with Rogers Communications for the title of Canada’s largest cable broadband provider, and previously aborted a planned cellular network rollout of its own, opting to sell its spectrum instead. Shaw’s CEO Brad Shaw declared yesterday: ‘The acquisition of Wind … will allow us to offer a converged network solution to our customers that leverages our full portfolio … including fibre, cable, Wi-Fi, and now wireless.’

Wind is Canada’s fourth largest mobile operator by subscribers, controlling around 3% of the market at the end of September 2015 according to TeleGeography’s GlobalComms Database. Operating 3G mobile services across Ontario, British Columbia and Alberta with 50MHz of spectrum in each of these provinces, Wind currently has approximately 940,000 subscribers according to a press release, which adds that the cellco is expected to generate CAD485 million in revenue and CAD65 million EBITDA in calendar year 2015. Wind has continued to invest in 3G network and service upgrades and has scheduled a commercial upgrade to 4G LTE by 2017.

Shaw, having abandoned its own cellular rollout plans, has recently concentrated on the expansion of its Wi-Fi network (‘Shaw GO WiFi’) which comprises over 75,000 hotspots, and Brad Shaw added: ‘The time has come to offer even more mobility to our customers … 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 Wi-Fi infrastructure.’

Under the terms of the deal, Shaw will acquire 100% of the shares of Mid-Bowline Group Corp and its wholly-owned subsidiary Wind Mobile Corp for an enterprise value of approximately CAD1.6 billion based on quarterly financial statements as of 30 September 2015. Shaw adds that it 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 approvals 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 Group Corp have approved the transaction and closure is expected during the third quarter of Shaw’s fiscal year 2016, i.e. by the end of May.

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