Canadian cable operator Shaw Communications Inc. (TSX:SJR.B)(TSX:SJR.PR.A)(TSX:SJR.PR.B)(NYSE:SJR)(TSX VENTURE:SJR.A) has sold its ViaWest IT and colocation services subsidiary to Peak 10 Holding Corp. for approximately C$2.3 billion (US$1.675 billion) in cash. Peak 10 is a portfolio company of private investment firm GI Partners.
Shaw purchased ViaWest in 2014 for approximately C$1.3 billion (US$1.2 billion). The company expects to realize approximately C$900 million in cash from the current transaction after the repayment of ViaWest level indebtedness of approximately US$580 million, repayment of the US$380 million Shaw credit facility borrowings associated with the original investment and subsequent INetU acquisition, and estimated transaction expenses and taxes. The company expects the deal to close by the end of its current fiscal year this August.
"The ViaWest acquisition in 2014 marked a pivotal moment in Shaw's history and provided a growth engine which has delivered, and continues to deliver, strong results," said Brad Shaw, Shaw Communications CEO. "The outlook for ViaWest remains robust, though the North American colocation and managed services industry is consolidating and scale is becoming an important factor for continued long-term success. We believe the combination of ViaWest and Peak 10 creates a platform for growth and ensures the combined entity's customers and employees are well positioned for the future."
Peak 10 provides hybrid IT infrastructure services including data center services, private and enterprise cloud infrastructure, and managed services. The company operates 24 data centers in 10 markets in the U.S., primarily serving mid-sized enterprises around the globe. GI Partners acquired Peak 10 in 2014. Together, the combined companies will operate in 20 domestic and international markets including Atlanta, Austin, Charlotte, Cincinnati, Dallas, Denver, Ft. Lauderdale, Jacksonville, Las Vegas, Louisville, Minneapolis, Nashville, Phoenix, Portland, Raleigh, Richmond, Salt Lake City, Tampa, Amsterdam, and Calgary. The two companies serve a combined 4,400 customers.
"As we contemplated strategic partnerships, we quickly concluded that Peak 10 offered a complementary footprint, shared focus on the customer, and talented team," explained Nancy Phillips, CEO of ViaWest. "I'm excited for our customers and employees because this combination will deliver an unparalleled customer experience and create dynamic growth opportunities."
The sale is subject to customary conditions, including U.S. regulatory approval.
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