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REGINA, January 14, 2011 — SaskTel announced today that it has reached an agreement with PFM Capital Inc. (on behalf of a group of investors) for the sale of Hospitality Network Canada Inc. (HN) assets. The sale price net of working capital adjustments is $36.6 million (subject to closing adjustments).
“SaskTel is pleased with this agreement and that the new owners have indicated they will continue to have HN’s head office in Regina,” said Ron Styles, SaskTel President and CEO. “SaskTel will continue to focus on our core business of providing Saskatchewan residents with leading edge communications services.”
“The outcome of the sale process represents one of the best scenarios for our company. I am pleased that there will be continuity in both our head office location and with our employees,” said Doug Jesse, HN President and CEO. “As a result there will be no impact to our customers. I appreciate the opportunity to continue to lead HN, along with PFM and the Founders Group. The stability of our core business and the exciting growth opportunities position us very well for continued success.”
The purchaser is comprised of investment funds managed by PFM Capital Inc., including SaskWorks Venture Fund and APEX Investment LP, and further includes a Founder Group led by Alan Simpson (founding shareholder and former President and CEO of HN).
“We are happy that we were successful in bidding for this well-performing Saskatchewan headquartered business, which will now benefit all of the Saskatchewan individuals and institutions that invest in our Funds,” said Rob Duguid, Vice President, Investments of PFM Capital Inc.
CIBC World Markets Inc. served as exclusive financial advisor to SaskTel and conducted a thorough public sales process, which included 63 prospective buyers indicating an interest in HN. It is anticipated the sale will close January 31, 2011.
Saskatchewan Telecommunications Holding Corporation (SaskTel) is the leading full service communications provider in Saskatchewan, with $1.15 billion in annual revenue and more than 1.4 million customer connections including more than 550,000 wireless accesses, 543,000 wireline network accesses, 225,000 Internet accesses and 77,000 Max™ (TV) subscribers. SaskTel offers a wide range of communications products and services including competitive voice, data, Internet, entertainment, national security, messaging, cellular, wireless data and directory services. In addition, SaskTel International offers software solutions and project consulting in countries around the world. In 2009, SaskTel contributed more than $651 million to the Saskatchewan economy through dollars spent with Saskatchewan-based suppliers and sponsorships to non-profit organizations. SaskTel and its wholly-owned subsidiaries have a workforce of approximately 4,800 employees. Visit SaskTel at www.sasktel.com.
About Hospitality Network
Hospitality Network is the preferred provider of managed communication and entertainment solutions for the Canadian healthcare market. Hospitality Network provides service to more than 380 healthcare locations nationwide, including Canada’s largest hospitals and Seniors Care Homes. The head office is in Regina, Saskatchewan with an operations and sales office in Mississauga Ontario. There are 333 employees nationwide, including 38 in Saskatchewan. Visit HN at www.hospitalitynetwork.ca.
About PFM Capital Inc.
PFM Capital Inc. is a Saskatchewan private equity investment management company. Its 13 staff manage over $350 million on behalf of Saskatchewan individuals and institutions. PFM invests primarily in small and medium sized private businesses that are headquartered in, or have a significant impact in Saskatchewan. PFM’s largest fund is SaskWorks Venture Fund, which has $195 million in assets and over 18,000 Saskatchewan shareholders. Visit SaskWorks Venture Fund at www.saskworks.ca
For media inquiries only, please contact:
Darcee MacFarlane, SaskTel Corporate Communications
Phone: (306) 777-4441
Rob Duguid, PFM Capital Inc.
Phone: (306) 791-4832