Well today, the biggest news ever escaped with the announcement that G3 Telecom, with wireless and U.S. operations in tow, would be acquired by Telehop Communications, Inc. after the company signed a Letter of Intent to do so.
A private placement of $3 million of 10% unsecured 5 year debentures was made and the purchase price for the business will be $4.3 million, payable $2.0 million in cash on closing and, $1.5 million over 24 months with interest at 5%, and $800,000 by the issuance of 8 million common shares of Telehop. The proceeds of the debentures will finance the cash payment and the closing and integration costs of the new G3 business with Telehop.
“This acquisition is transformational for Telehop as it will double its revenue base, and combine land line services with wireless services…”
“Last year we purchased the business services division from G3 which has worked out successfully,” said CEO Rajiv Jagota. “Today we are complementing our business with the fast growing wireless telecom business to round out our product line. This acquisition is transformational for Telehop as it will double its revenue base, and combine land line services with wireless services which will provide synergies among our 2 customer bases, and offer economies of scale to improve bottom line performance in the future.”
There will also be a few changes in the management as well. Rajan Arora, the CEO of G3, will join the board of Telehop on completion of the acquisition.
“I’m excited about the opportunity to combine these companies and truly leverage the strengths of each organization,” said Rajan Arora. “Combined together we should be able to grow and expand into new markets with size and scale.”
Of course, as with all transactions of this kind, this transaction has to undergo the usual approval processes, in this case the approval of the TSX Venture Exchange.
G3 Telecom started off as a long distance provider in 1999 and services customers in both the US and Canada and gradually expanded to offer the aforementioned travel SIM card, which is aimed at B2B and B2C customers. Upon approval of this transaction with Telehop, it’s unclear whether the G3 branding will survive or will be fully integrated under the Telehop banner. We’ve reached out to both companies to clarify this and will update the article once we’re able to confirm.