TeraGo Intends to Use Proceeds from the Sale
to Pay Off Long-Term Debt and Fund Operating Initiatives
TORONTO, Jan. 31,
2022 /CNW/ - TeraGo
Inc. ("TeraGo" or the "Company") (TSX: TGO),
(www.terago.ca), has closed the previously announced
sale of its cloud and colocation business lines to a subsidiary of
Hut 8 Mining Corp. (Nasdaq: HUT) (TSX: HUT) ("Hut 8") for
Cdn.$30 million in cash. TeraGo
intends to use the proceeds from the divestiture to pay off
long-term debt and fund operating initiatives.
"The successful sale of our cloud and colocation business lines
represents a pivotal moment in our journey to become Canada's leading provider of mmWave 5G private
networks for businesses," said TeraGo's CEO Matthew Gerber. "In addition to strengthening
our balance sheet, we now have greater bandwidth and more resources
to accelerate our millimeter wave 5G private networking strategy
and capitalize on the significant opportunities for 5G services in
Canada."
In connection with the transaction, Hut 8 acquired TeraGo's
cloud and colocation customers, employees, certain other contracts,
intellectual property rights, and other assets related to the cloud
and colocation business lines. TeraGo's senior executives and
employees that are part of TeraGo's fixed wireless access and 5G
business line will remain with TeraGo. The company will provide
support to Hut 8 over the next few months to ensure a seamless
transition.
Advisors
DH Capital served as financial advisor to
TeraGo and InHaus Legal LLP & Norton Rose Fulbright Canada LLP
acted 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.