A private equity firm is purchasing Bruce Telecom from the Municipality of Kincardine.
The company that started in 1911 and has been a municipal services corporation of Kincardine since 2017, will be sold to Toronto-based Windsor Private Capital.
Kincardine says it will receive over $32 million, less disbursements and closing costs, for all its shares in the company.
The unsolicited offer came across the municipality's desk this spring and the Bruce Telecom board of directors as well as a third-party review found the deal to be "fair and reasonable."
Mayor Ken Craig says the Municipality believes it is in its best interest to sell.
"It is our thought process that the ability for the municipality to ultimately support the capital needs of a smaller telecommunications company in an enormous market were beyond our capabilities," he said. "You know, this year is fine, next year is fine, ten years might be fine, but when you are the sole-shareholder, you have to look out for the quality of life and it could be sometimes that's by holding an asset and sometimes it's by divesting. It was our choice at this time to look at liquidating this asset."
Craig added that the municipality will "reinvest the proceeds back into the community towards key projects that support quality of life.”
However, the sale doesn't come without concerns. A study from Harvard and the University of Chicago found that employment of publicly backed companies falls 13% over the first two years when bought out by a private equity firm.
Craig said the municipality could not speak to job security concerns that come with a change on ownership, asking CKNXNewsToday.ca to contact Bruce Telecom's President and CEO Ray Lahoud.
Lahoud noted he would be busy speaking with the Bruce Telecom employees throughout the day but shared some quick thoughts on the deal.
"This is great news for all of us," he said in an email. "Windsor Private Capital brings capital and strategic connections that will benefit our employees and customers. Our customers can expect the same high level quality service experienced to date. Existing services, locations, platforms, accounts, billing and rates, management and employment all remain unchanged."
The deal is subject to approval from Innovation Science and Economic Development Canada (ISED), which is expected to take three to four months.