VICTORIA, BC – Vecima Networks Inc. has announced that its subsidiary YourLink Inc. is selling a portion of its wireless spectrum assets in the 3.5 GHz band to a Canadian wireless service provider. The purchasing company was not named in the Vecima press release.
The deal is structured in phases, the first phase includes the purchase of 16 licenses, predominantly in Alberta and Ontario for a purchase price of $8 million. Following the Phase 1 closing, the purchaser will have paid for the option to purchase an additional 20 spectrum licenses in a second phase for a purchase price of up to $11 million on or before December 31, 2011.
The agreement also provides the purchaser with a right of first refusal for approximately $1 million on additional spectrum licenses in addition to those subject to the first two phases of the transaction.
The licenses sold in both phases together represent approximately 58% of YourLink’s current sub-10GHz spectrum asset holdings measured on a MHz-POP basis.
"As we have mentioned on numerous occasions, Vecima’s spectrum assets carry substantial value that is not reflected in their carried value. This transaction is further strong evidence of that," said Dr. Surinder Kumar, CEO of Vecima Networks.
Victoria-based Vecima Networks laid off 142 people this past April at its Saskatoon manufacturing operations in what the company called a cost-saving initiative to return to “operational profitability.” The job cuts, representing about 18% of the company’s workforce of 789, were expected to reduce costs by $6 million.
