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Name
Description
People's Communications
Sale Advisory
People's Communications, a widely held independant provider of integrated telecom services, was acquired by Amtelecom Income Fund, a TSX-listed income fund.
Crosbie acted as financial advisor to People's and provided a fairness opinion to its Board.
The Transaction
People's Communications Inc., a widely held independent provider of telecom services based in Forest, Ontario, was acquired by Amtelecom Income Fund, a TSX-listed fund, by way of a plan of arrangement.
This synergistic transaction combined Ontario's 3rd largest (Amtelecom) and 10th largest small incumbent local telephone companies, each with approximately 100 years of service history, creating a significantly stronger player in Ontario's independent teleco sector.
The transaction concluded a bidding war between Amtelecom and Execulink, another local service provider, that saw 12 bids and counterbids over a 6-week period. We assisted People's in securing an all-cash offer that represented a 150% premium to its last trading price and 43% above Amtelecom's initial offer. In addition, People's classification as a QSBC allowed eligible shareholders to utilize their lifetime capital gains exemption and receive their applicable proceeds tax-free. People's shareholders voted 81% in favour of the acquisition proposal.
About the Company
People's provides local and long distance telephone service in Forest, Ontario through approximately 5,200 residential and business access lines; Internet and data services through its wholly-owned subsidiary, Xcelco Internet Services, to approximately 4,650 subscribers; and integrator services including business phone system sales and installation, data wiring and fibre optic cabling through its wholly-owned subsidiary, Interlink Telecommunications.
Crosbie's Role
As advisor to People's, Crosbie evaluated the initial unsolicited offer, actively solicited other offers, managed the negotiations with the bidders and provided advice to the Board of Directors on all business matters relating to the transaction and also provided a fairness opinion. This process, conducted on a highly confidential basis, helped to maximize value for the People's shareholders. Given that People's shares were widely held, the process was typical of any public take-over or take-over defence.
