Public Mobile Inc., a Toronto-based wireless operator, was acquired by U.S. and Canadian investors two days after the Canadian government blocked rival Mobilicity’s deal to be bought by Telus Corp.
Thomvest Seed Capital Inc., an investment vehicle of Peter J. Thomson, and Cartesian Capital, a New York-based private-equity firm, purchased Public Mobile for an undisclosed price, according to a statement today. Thomson is the brother of David Thomson, whose $24.6 billion net worth is the world’s 23rd-largest, according to the Bloomberg Billionaires Index.
Industry Minister Christian Paradis blocked Telus’s C$380 million ($368 million) accord to buy Mobilicity, citing the need to defend consumer choice against Canada’s big three carriers. Mobilicity, Public Mobile and a third new operator, Wind Mobile all bought wireless spectrum in a 2008 auction and have struggled against Telus, Rogers Communications Inc. and BCE Inc. (BCE)
“Circumstances in the Canadian wireless industry have created a window for Canada’s fourth wireless player to emerge,” Stefan Clulow, managing director at Toronto-based Thomvest, said in the statement.
Thomvest and Cartesian said today that they’re prepared for further deal-making and may bid for wireless spectrum in a government auction set for January. Wind Mobile, the largest of the three new entrants, is being considered for a possible sale by its backers, a person with direct knowledge of that process said last month, asking not to be named because the information is private.
Paul Pizzani, a partner at Cartesian, said that “Public Mobile is well-positioned to grow in scale by pursuing these consolidation opportunities and by bidding for national spectrum in the 700 MHz auction.”
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 said.
The transaction “received the continuing support and partnership” of Chinese mobile-phone maker ZTE Corp. (000063) and the Export-Import Bank of China, Public Mobile said, without elaborating.
Peter Thomson is chairman of Woodbridge Co., the Thomson family investment company which has a 55 percent stake in New York-based Thomson Reuters Corp. He also is on the Thomson Reuters board.
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