TORONTO, May 24 (Reuters) - Manitoba Telecom Services Inc said on Friday it has struck a deal to sell its Allstream business, a fiber optic network stretching across Canada, to Accelero Capital Holdings for C$520 million ($502.8 million), including debt assumed by the buyer.
Winnipeg-based Manitoba Telecom last year said it had begun a wide-ranging strategic review of its Allstream business that could result in the sale of the unit.
“This transaction makes MTS a stronger, more focused and more valuable company,” Chief Executive Pierre Blouin said in a statement. “MTS goes forward as a pure-play telecom with a strong consumer franchise and significant free cash flow to support our dividend.”
The deal will provide MTS with sufficient capital to invest in wireless spectrum and to continue bringing fibre-to-the-home, 4G LTE wireless technology and other products to communities in Manitoba, the company said.
After closing costs, MTS said it expects to realize net proceeds of about C$405 million from the deal with Accelero, an investment and management group focused on telecommunications, digital media and technology.