Canadian fixed-line operator and DTH provider Shaw Communications has struck a deal to acquire US data centre operator ViaWest.
It is buying 100% of the business from private equity firm Oak Hill Capital Partners, minority investor GI Partners, and…
Canadian fixed-line operator and DTH provider Shaw Communications has struck a deal to acquire US data centre operator ViaWest.
It is buying 100% of the business from private equity firm Oak Hill Capital Partners, minority investor GI Partners, and other shareholders for an enterprise value of US$1.2bn.
Shaw will pay US$830m for the business and assume its US$370m debt pile. It will fund the takeover through cash on hand and its existing credit facility. The price tag is 13x ViaWest’s adjusted annualised Q2 EBITDA.
Shaw’s share price fell 2.85% yesterday following the deal announcement.
Explaining the rationale for the tie-up, Shaw’s CEO Brad Shaw said: “We identified the data centre sector as an attractive opportunity adjacent to our core business and with the acquisition of ViaWest, Shaw gains significant capabilities, scale and immediate expertise in the growing marketplace for enterprise data services.”
The transaction sees Shaw – which has been primarily focused on its consumer triple-play offering – turn its attention to business customers.
ViaWest’s operations are limited to the west of the US where it has 27 data centres, making it one of the largest privately-held infrastructure providers of its type. Shaw plans to leverage the experience of ViaWest’s management team to improve its Canadian data centre business.
However, ViaWest will remain separate from Shaw and will keep its headquarters in Denver, Colorado. ViaWest’s co-founder, president and CEO, Nancy Phillips, will also keep her position.
The deal is subject to US regulatory approval and Shaw expects the transaction to close as soon as September.
TD Securities is acting as financial adviser to Shaw while Davies Ward Phillips & Vineberg and Simpson Thacher & Bartlett are serving as its legal counsel.
ViaWest is working with M&A adviser RBC Capital Markets and law firm Paul, Weiss, Rifkind, Wharton & Garrison.