Bell Aliant will sell its xWave IT solutions division to BCE Inc.’s Bell Canada for $40 million, the companies announced today.
Aliant, the dominant phone company in the Maritimes, says it is getting out of integrating technology for businesses so it can concentrate on its fibre to the home strategy, as well as improve its balance sheet. “We have known for some time that for xWave to continue to expand nationally and grow profitability they needed access to scale,” Aliant president and CEO Karen Sheriff said in a press release. “Combining with Bell gives xwave access to a national market and additional IT capabilities they do not have today.” After the deal closes Jan. 1, 2011, xWave will become aligned with the Bell Business Markets division.
This isn’t the first time Aliant has spun off an asset to BCE, which is its controlling shareholder with a 44 per cent interest in the company.
In 2006, as part of the plan to covert from a publicly-traded company toan income trustAliant sold its cellular operation to Bell Canada.Because Ottawa has changed the rules and will begin to tax income trusts starting in the new year, Aliant plansto disolve the trust and again become a publicly-traded corporation.
In the news release Aliant said the valuation of xWave was assessed as fair by an independent valuator.