Teliphone Corporation, one of British Columbia’s largest digital telecommunication companies, has entered into agreement with Investel Capital Corporation (Investel) to sell its shares of Teliphone Navigata –Westel Communication Inc. (TNW, a wholly owned subsidiary) for $45 million.
The sale was prompted in part by the inability of Teliphone Corp to receive a waiver from the requirement under US Securities and Exchange Commission Regulations S-X to audit Navigata Communications 2009 Inc. (Navigata). Teliphone purchased Navigata's network, operations and specific assets in December 2012. Teliphone determined that it would be prohibitively expensive, lengthy and difficulty if not impossible to audit Navigata as it did not purchase the company itself. The current sale will however, provide Teliphone shareholders with value for all investments made since its creation in 2004 and will allow the company to continue to further grow through acquisition. TNW becomes a Canadian controlled private corporation (CCPC) and as a result of the transaction will have a stronger balance sheet and positive working capital. With its improved financial situation, TNW will be better positioned to accelerate its business plan of growth through increased sales and through acquisition.
Teliphone will file all required disclosures with the US Securities and Exchange Commission within the prescribed period.
Teliphone Navigata-Westel, employs 130 employees and has CD$55 million in annual sales, it is one of the largest independent facilities-based Competitive Local Exchange Carriers (CLEC) in Canada and provides voice, data, broadband Internet, IT support, cloud computing, co-location data centers and IPTV (News - Alert) service across Canada. TNW also operates a US network and its voice and IPTV services are available in 47 countries.
Benoit Laliberté, President of Teliphone stated, "We have been building Teliphone Corp since 2004 through organic growth, acquisition and consolidation. The timing was right to sell our core Canadian asset and continue our growth plan. Teliphone Corp will now focus on the US market where it will continue its successful business strategy of seeking out and acquiring distressed telecommunications assets and turning them around. TNW will pursue a similar strategy in the Canadian market as a competitive local exchange carrier."