According to this Telesystems piece, the merger with Look Communications is scheduled to close in August.
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Telesystem News
Major new player emerges in Canada's Internet industry.
A Perfect Fit
Look Communications Inc. and I.D. Internet Direct Ltd. are joining forces to create a new competitive force in the Canadian market for communication, information and entertainment services.ÿ Expected to close before the end of August 1999, the amalgamation will bring together two organizations with complementary assets and skill-sets, driven by a common vision.
Look Communications, an emerging provider of digital television services in Ontario and Quebec through wireless cable, needs expertise to exploit the full potential of its broadband network.ÿ As Canada's largest independent Internet Service Provider (ISP), I.D.ÿ Internet Direct requires access to high-speed transmission capacity to sustain its rapid growth.ÿ During their first meeting, the controlling shareholders of the companies recognized immediately that the two were a perfect fit.
Strategic positioning.
Look Communications owns and operates a digital Multipoint distribution System (MDS), a wireless technology capable of high-speed connectivity, and the company is in the process of introducing high-speed Internet services in Ontario.ÿ I.D. Internet Direct has built its customer base using dial-up access, limiting its growth options.
John Nemanic, President and CEO of I.D. Internet Direct says "Look Communications has a tremendous broadband network that will allow us to quickly offer high-speed data services to our customers.ÿ We gain access to readily deployed infrastructure and leading-edge transmission technology."
For Guy Crevier, Chairman of the Board of Look Communications, the key benefit is the ability to provide current and future customers with a bundled offer.ÿ "The combination of the two companies will allow us to bring customers a one-stop shop for communications services, including high-speed data services, broadcast distribution, Internet access and Web-related services."
Time to market is also important.ÿ "I.D. Internet Direct's experience in Web-based services, Points of Presence (POPs) and portal development means that we can accelerate our bundling plans," added Crevier.ÿ "This puts us two years ahead of where Look Communications would be on its own."
The strategic positioning of the new company is validated by recent moves south of the border.ÿ Several telecommunications companies in the United States, including Sprint, having selected MDS as an alternative way of increasing bandwidth to provide emerging data services, including video-over-data, IP telephone, home automation and e-commerce.
Immediate benefits
The amalgamated company will also be in a stronger position to seek public equity financing by leveraging I.D. Internet Direct's listing on the Vancouver Stock Exchange.ÿ Among the possibilities are listings on the Toronto Stock Exchange and the Nasdaq Stock market.
With the combined strengths of the two organizations, including the ability to provide a bundled offering, the new company will have the key factors of success to compete against cable and telecommunications companies, and be a major force in the rapidly growing Internet industry.ÿ As the largest independent Canadian ISP, it will be well-positioned to play the lead role in consolidating the highly fragmented Canadian ISP market, where the top 10 ISP's have a 45%-market share while the remaining 55% is distributed among a slew of independent ISPs.
Upon completion of the transaction, I.D. Internet Direct shareholders will hold 40% of the combined company; Look Communications shareholders will own 60%, with Telesystem Ltd.ÿ being the controlling shareholder. |
