Strategic Divestiture Positions TeraGo to
Focus on its 5G Private Networking
Business
TORONTO, Jan. 20, 2022 /CNW/ -
TeraGo Inc. ("TeraGo" or the "Company") (TSX: TGO) (www.terago.ca), announced
today it has entered into a definitive agreement to sell its cloud
and colocation business lines to a subsidiary of Hut 8 Mining Corp.
(Nasdaq: HUT) (TSX: HUT) ("Hut 8") for an aggregate consideration
of Cdn.$30 million payable in cash
upon completion of the transaction.
Under the agreement, Hut 8 is acquiring TeraGo's cloud and
colocation customers, employees, certain other contracts,
intellectual property rights, and other assets related to its cloud
and colocation business lines. The company's senior executives and
employees that are part of TeraGo's fixed wireless access and 5G
business line will remain with TeraGo. Additionally, in order to
ensure the smooth operation and transfer of the cloud and
colocation business lines, TeraGo will provide support and
transition services over the next few months.
"TeraGo is uniquely positioned in Canada with our broad customer base for
wireless services and our extensive millimeter wave spectrum
licenses; this transaction will enable us to focus on leveraging
these assets in our move to become Canada's leading provider of mmWave 5G private
networks for businesses," said TeraGo's CEO Matthew Gerber. "We see the need for 5G private
networks accelerating in the next few years as manufacturers,
distributors, transportation companies and other industries seek to
leverage the benefits of ultra-fast, ultra-low latency, private and
secure communications to improve operational efficiencies and lower
costs. We also believe that we found a great partner in Hut 8 as it
has the capabilities to support our cloud and colocation customers
for the long term, and provides opportunities for our two companies
to deliver services to each other's customers going forward."
The transaction is expected to close in the first quarter of
2022.
Advisors
DH Capital is serving as financial advisor to TeraGo and InHaus
Legal LLP & Norton Rose Fulbright Canada LLP are acting as its
legal counsel.
About TeraGo
TeraGo owns a national spectrum portfolio
of exclusive 24 GHz and 38 GHz wide-area spectrum licences
including 2,120 MHz of spectrum across Canada's 6 largest cities. TeraGo provides
businesses across Canada with
cloud, colocation and connectivity services. TeraGo manages over
3,000 cloud workloads, operates five data centres in the
Greater Toronto Area, the
Greater Vancouver Area, and
Kelowna, and owns and manages its
own IP network. The Company serves business customers in major
markets across Canada including
Toronto, Montreal, Calgary, Edmonton, Vancouver, Ottawa and Winnipeg. For more information about TeraGo,
please visit www.terago.ca.
Forward-Looking Statements
This news release includes certain forward-looking statements.
By their nature, forward-looking statements are subject to numerous
risks and uncertainties, some of which are beyond TeraGo's control.
The completion of the proposed transaction with Hut 8 is subject to
certain terms and conditions which TeraGo believes to be customary.
Such terms and conditions may not be satisfied or obtained in
accordance with their terms, in which case the proposed transaction
could be modified or terminated, as applicable. Other
forward-looking statements may include but are not limited to
statements regarding the timing for closing of the proposed
transaction, as well as statements regarding the further developing
our 5G Fixed Wireless Access program, consistently executing across
all fronts of the business, success in providing Canadian
enterprises with managed services and the 5G fixed wireless trials
being conducted by the Company. All such statements constitute
"forward-looking information" as defined under, applicable Canadian
securities laws. Any statements contained herein that are not
statements of historical facts constitute forward-looking
information. The forward-looking statements reflect the Company's
views with respect to future events and is subject to risks,
uncertainties and assumptions, including those risks set forth in
the "Risk Factors" sections in the annual MD&A of the Company
for the year ended December 31, 2020
and the MD&A of the Company for the three and nine months ended
September 30, 2021, each available on
www.sedar.com under the Company's corporate profile. Factors that
could cause actual results or events to differ materially include
the inability to consistently achieve sales growth across all lines
of TeraGo's business including managed services, inability to
complete successful 5G technical trials, the impacts and
restrictions caused by the COVID-19 pandemic are prolonged which
may further delay customer trials and/or cause a negative impact on
future financial results of the Company, TeraGo's Pandemic Response
Plan may not mitigate all impacts of COVID-19, the results of the
5G trials not being satisfactory to TeraGo or any of its technology
partners, regulatory requirements may delay or inhibit the trial,
the economic viability of any potential services that may result
from the trial, the ability for TeraGo to further finance and
support any new market opportunities that may present itself, and
industry competitors who may have superior technology or are
quicker to take advantage of 5G technology. Accordingly, readers
should not place undue reliance on forward-looking statements as
several factors could cause actual future results, conditions,
actions or events to differ materially from the targets,
expectations, estimates or intentions expressed with the
forward-looking statements. Except as may be required by applicable
Canadian securities laws, TeraGo does not intend, and disclaims any
obligation, to update or revise any forward-looking statements
whether in words, oral or written as a result of new information,
future events or otherwise.
SOURCE TeraGo Inc.