The family that controls publicly-traded call centre operator TigerTelCommunications plans to privatize the Mississauga, Ont.-basedcompany, which has been stung by falling profit. The company said in apress release Monday that a numbered company controlled by the Swiftfamily and TigerTel have inked a non-binding letter of intent to buyout all remaining shareholders in the company, traded on the Torontoventure exchange.
The numbered company is controlled by TigerTelpresident and CEO Douglas D. Swift and fromer board chair Donald H.Swift. The Swifts own about 53.43 per cent of the company's shares. Acompany spokesman said Douglas Swift was on vacation and couldn't bereached for comment on how the privatization will affect customers.
TigerTelhas 12 call centres across the country, from Halifax to Nanaimo, B.C.that offer English and French inbound and outbound messaging services.Customers have included the Canadian Red Cross, Genius Solutions andCummins-Allison. For the year ending April 30, it pulled in $22.5million. However, its revenues depend on the traffic volumes of itscustomers and they took a hit in the second half of last year. In thequarter that ended Oct. 31, 2008, for example, TigerTel reported netincome of $161,900, compared to $241,111 for the same period in 2007 inpart because of substantially lower traffic.
The company'sshares, which had been trading for most of 2008 at the 25 cent level,dropped in January to 2 cents shortly after that announcement. Sincethen the shares have clawed their way back to the 20 cent range. TheSwifts have offered 25 cents a share in their buyout.
Thebuy-out offer came three days after TigerTel issued its year-endresults, which showed fourth quarter revenue had bounced back.Still, for the year TigerTel had net earnings of $692,547, comparedwith $1.1 million for the previous fiscal year, in part due to what thecompany called a one-time unusually high bad debt write-off.
Theproposed buy-outwill be voted on at a special meeting of TigerTelshareholders sometime after Aug. 14, when a final deal is to be struck.The parties anticipate the deal will be closed around Oct. 31.