Canada's Public Mobile bought by venture, private equity firms
By Euan Rocha
TORONTO (Reuters) - Canadian telecommunications startup Public Mobile said on Thursday that it was acquired by venture capital firm Thomvest Seed Capital and private equity firm Cartesian Capital, a deal that points to active interest in new entrants to the sector.
Privately held Public Mobile, is based in Toronto and provides wireless coverage in Ontario and Quebec. Terms of the deal were not disclosed.
The announcement comes just two days after Canada refused to allow the transfer of wireless spectrum licenses to Telus Corp (T.TO: Quote) from Mobilicity, another startup. The ruling effectively blocks Telus' takeover of the struggling company.
The Canadian government, which wants to boost competition in the sector and reduce wireless phone bills, hopes investors other than industry leaders Telus, Rogers Communications (RCIb.TO: Quote) and BCE Inc's (BCE.TO: Quote) Bell will invest in the new entrants.
Public Mobile, Mobilicity and other new companies bought wireless spectrum during an auction in 2008 and have helped to lower wireless phone bills. But these companies have also struggled to turn profits, forcing them to explore alternatives.
"Circumstances in the Canadian wireless industry have created a window for Canada's fourth wireless player to emerge," Thomvest managing director Stefan Clulow said in a statement.
Thomvest is a Toronto-based investment vehicle backed by Peter Thomson. He is chairman of Woodbridge, the Thomson family investment company that owns a majority stake in Thomson Reuters Corp (TRI.TO: Quote). Cartesian is based in New York. Continued...