PE-owned broadband provider Xplornet explores sale: Reuters

Canadian privately-held broadband provider Xplornet Communications Inc has hired two investment banks to explore a potential sale that could value the company at $2 billion (US$1.55 billion), including debt, according to sources familiar with the matter.

Xplornet, based in Woodstock, New Brunswick, is working with UBS Group AG and Bank of Montreal to assist it in the sales process, the sources added, asking not to be named because the matter is private.

Xplornet and UBS could not be reached for comment. A spokeswoman for Bank of Montreal declined to comment.

The sales process, which is in its early stages, could attract interest from private equity firms and infrastructure funds, the sources said.

The company generated earnings before interest, taxes, depreciation and amortization of US$175 million last year and could sell at a multiple of 12 to 13 times that amount, according to the sources.

Xplornet serves more than 300,000 rural Canadians in areas that typically cannot be covered by regular wireless networks. It operates a hybrid network of fixed-wireless towers on the ground and next-generation satellites to reach remote regions. It was founded by two brothers, Bill Barrett and Ed Barrett, in 2004.

Xplornet’s private owners include U.S. private equity firms Sandler Capital Management and Catalyst Investors. The firms did not immediately respond to a request for comment.

Update: Xplornet has also been backed by Canadian family office Werklund Capital Corp.

Last November, Xplornet acquired the internet access business of Brandon, Manitoba-based NetSet Communications, held by Roynat Equity Partners since 2014.

(Reporting by Liana B. Baker in New York; Editing by Tom Brown)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

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