TORONTO – Telecom reseller Primus Telecommunications Canada Inc. has been granted protection under the Companies’ Creditors Arrangement Act (CCAA) and is seeking approval of a plan to sell its business to U.S. telecom provider Birch Communications Inc. for approximately $44 million.
According to a report in the Globe and Mail, Primus’s sales over the past four years have tumbled as customers have cancelled legacy products, such as home phone and long-distance calling. The Toronto-based company has been unable to make up the difference with more lucrative products such as higher-speed Internet services.
As one of the largest alternative telecom operators in Canada, Primus has more than 200,000 residential customers and 23,000 small and medium-sized business clients, as well as approximately 27,000 residential customers in the United States and Puerto Rico.
The sale agreement with Atlanta-based Birch Communications was signed on Monday and the transaction has the approval of Primus’s board, continues the report. The agreement and the CCAA process will allow the company to continue serving customers and keep its employees – 502 in Canada and 28 in the U.S. – at work while the sale is finalized.
