Bell Canada said Wednesday it is buying the Canadian assets of former tech darling 360networks Corp. for $275-million in a deal that significantly increases its network holdings in Western Canada.
As part of the deal, Bell — a unit of Montreal-based BCE Inc. — will also sell 360networks' Eastern Canadian assets and customer base to Call-Net Enterprises Inc.
“The acquisition doubles our network footprint and our access to customers in Western Canada,” Bell Canada chief executive officer Michael Sabia said in a statement.
“This move further demonstrates our sustaining commitment to expanding our presence in the west and solidifies our position as Canada's national communications company.”
360networks sought court protection from its creditors three years ago after a failed attempt to build an estimated $7-billion (U.S.) global network of fibre-optic cable.
However, over the last year and a half, the company has managed to carve out a profitable niche for itself serving mid-sized Canadian business customers.
The assets being acquired by Bell Canada include 360networks' fibre network, which includes local facilities in Vancouver, Victoria, Calgary and Edmonton among other Western Canadian cities. The deal gives Bell access to nearly 200 office buildings in those regions.
The purchase also includes 360networks' subsidiary, GT Group Telecom Services Corp. and related U.S. assets.
The acquired businesses will operate as a division of Bell Canada under the 360networks and Group Telecom banners.
Under Wednesday's agreement, Bell also said it will sell off a significant portion of the acquired assets in Ontario, Quebec and Atlantic Canada to Call-Net, which operates Sprint Canada.
Bell didn't say how much Call-Net was paying for those assets.
