UPDATED: Bragg going international, expands to Bermuda in US$70 million deal
|February 23, 2011|
HALIFAX - The Bragg Group, parent company of EastLink, is going south.
The company announced today its first international cable/telecom expansion with the purchase of Cable and Wireless (Bermuda) Holdings. CWBH is a 121-year old Bermuda telecommunications operation with both residential and business customers, owned by the UK-based international telecom firm Cable & Wireless Communications Plc (CWC), a company with a wide presence in the Caribbean.
(The move also expands the Canadian presence down south. Columbus Communications [owned and operated by a number of Regional Cablesystems/Persona executives] runs cable and telecom operations in Trinidad, Jamaica, Grenada, Curacao and other countries under the Flow or Columbus Communications banners. However, once you look at a map, Bermuda is quite a ways off from the Caribbean.)
The purchase gives the Bragg Group its first presence in the communications industry outside Canada. Binding agreements were signed Tuesday, with closing to take place within a few weeks.
The company has also bought fibre capacity on a shared undersea fibre network (with France Telecom) which runs into the United States and into the Caribbean. (Of note, the first undersea cable to Bermuda was run in 1890, from Nova Scotia.)
"This investment is a logical step for our company," said Lee Bragg, CEO of EastLink and an executive of the Bragg Group, the company founded by his father John Bragg, owner of Oxford Foods, a Canadian-based but internationally-focused company. It is the world’s largest supplier of frozen wild blueberries, for example.
"Apart from being an excellent investment that we expect will provide growth opportunities for many years, there are natural synergies between Nova Scotia and Bermuda," Lee Bragg noted, pointing to the substantial financial services industry that has developed between the province and Bermuda in recent years.
"This is just one commercial sector that relies heavily on up-to-date telecommunications infrastructure to transfer large quantities of data quickly and securely. I expect our new relationship with Bermuda will lead to many other business opportunities for our company both in Bermuda and in Canada.”
Ann Petley-Jones, founder and CEO of Nova Scotia company PetaData (which does business in Halifax and Bermuda, but will be shuttered) and former CIO of Nova Scotia Power, will be the CEO of the Bermuda businesses. Her company included former senior executives from Global Crossing, Williams Communications, Bell Atlantic/Verizon, Cable & Wireless, GlobeNet and others.
“We think this is a very strong acquisition,” Petley-Jones said in an interview with Cartt.ca. She added the CWBH was not for sale, but that the deal had been pursued for about a year. “This did not come on the market, we approached them,” she said.
Bermuda is a wealthy island. It is the third-largest re-insurance centre in the world (transactions where insurance companies insure each other in the event of huge disasters) and its 62,000 residents have a per capita income 1.5 times that of the average in North America, added Petley-Jones.
“During the transition period, the Bermuda companies will operate as they do today, with the same employees, local management, processes and contact points. Management support and certain support services from Guernsey and London, will now be repatriated to Bermuda. Following the transition, we will build on CWC's long history in Bermuda, as well as the Bragg Group's reputation for reliability, innovation and high-quality products, supported by superior customer service, to provide additional telecom and e-commerce services to Bermuda businesses and consumers,” added Bragg.
"CWBH, with its subsidiary companies and Quantum investment, have been great businesses for CWC. We look forward to using our experience and expertise to further develop a full range of communications services for our new customers in Bermuda."
The company does not have a cable/video arm nor wireless as yet, but the government is apparently moving towards deregulation. “We anticipate those barriers will be coming down in the name of competition,” said Petley-Jones. So Bragg executives are hopeful it will be able to grow the company in that direction, while keeping its current customers happy.
“Bermuda’s economy is international business and international finance, so you know how important telecom is to them,” she added.