Burnaby-based Glentel Inc. (TSX:GLN) saw its share value soar nearly 16% in midday trading Monday on news the company had signed a deal to buy a 128-store wireless retailer in the U.S.
The local telecommunications company, which has 280 locations across Canada, has agreed to pay US$50.45 million to secure an 81.5% stake in Diamond Wireless LLC.
Diamond is a mall-based Verizon Wireless “premium retailer.”
The company is based in Salt Lake City, but its 128 locations employ 750 people in malls across the continental U.S. and Hawaii.
Glentel CFO Jas Boparai told BIV the deal is a good entranceway to the U.S. wireless market.
“The growth potential there is 10 times larger,” said Boparai. “The subscriber base in Canada is probably just as large as one carrier down there and this company [Diamond] it’s a healthy company, the culture fits so it just made sense.”
He also said Diamond will retain its management team.
That means Glentel will remain focused on its Canadian operations while Diamond expands its U.S. presence for the good of the whole company.
The deal is expected to close Oct. 1.
Glentel has also agreed to buy the remaining 18.5% of Diamond at a later date.
BIV caught up with Glentel in January as the company prepared itself for more competition in the Canadian market. (See “Third-party retailers set to profit from increased competition in Canada’s wireless phone market” – issue 1054; January 5-11, 2010)