Burnaby, B.C. - TELUS and certain subsidiaries of Virginia-based PSINet Inc. have signed an agreement whereby TELUS will purchase PSINet's Canadian operations and facilities for approximately US$77 million subject to final adjustments. The agreement supercedes the letter of intent announced June 1.
Under the terms of the agreement, TELUS will offer employment to at least 95 per cent of PSINet's Canadian-based employees. PSINet's Canadian operations recorded more than C$75 million in revenue last year. The company has a state-of-the-art Internet data centre in Toronto and approximately 8,600 corporate accounts across the country. The majority of PSINet's revenues are generated in Ontario.
TELUS' proposed purchase is subject to a number of conditions, including regulatory approval and approval under bankruptcy proceedings, including the Companies Creditors Arrangement Act in Canada. As part of the bankruptcy process in Canada and the U.S., PSINet will consider other qualified bids and if tendered, will hold an auction. Prospective bids are subject to a minimum incremental overbid amount. TELUS will be entitled to a break fee in certain circumstances.
"I'm confident that our offer is a fair and competitive one and TELUS will have the opportunity to serve PSINet customers later this summer when the sales process and all required reviews are complete," said Jim Peters, executive vice-president of TELUS Corporate Development.
"I'm delighted that TELUS recognizes the value of PSINet's Canadian operations," said Robert Offley, president of PSINet Canada. "We will continue to serve our customers throughout the auction process with the high level of service they have come to expect from us and will also continue to support our valuable employees."
In Canada, PSINet provides Internet access, Web hosting, security and e-commerce application services to the Canadian business and ISP markets. The company also delivers consumer and small business Internet services in the Calgary area through its wholly-owned subsidiary, CADVision. PSINet has about 50 points-of-presence, or connection facilities. It serves most major markets in the country, including Toronto, Montreal, Ottawa, Edmonton, Calgary and Vancouver.
TELUS Corporation (TSE: T, T.A; NYSE: TU) is one of Canada's leading telecommunications companies providing a full range of telecommunications products and services that connect Canadians to the world. The company is the leading service provider in Western Canada and provides data, Internet, voice and wireless services to Central and Eastern Canada.
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