Contact: Scott Denne Michael Levy
Canadian telecommunications company Rogers Communications seems to be on a datacenter M&A roll, buying Pivot Data Centres and Granite Networks today for a combined $158m. The deals are Rogers’ second and third datacenter acquisitions of the year. However, we don’t expect a fourth by year’s end.
Rogers is spending a combined $158m (C$161.5m) on two datacenter vendors – Pivot Data Centres for $151.5m and Granite Networks for $6.1m – which is on top of the $196m it already paid for BLACKIRON Data in April.
As Rogers and its peers have looked for new services to make up for lost landline revenue, the Canadian datacenter sector has undergone significant consolidation in the past two years, leaving few available premium assets in the market. With its reach for Pivot and Granite, Rogers buys two of the last ripe assets in Canada. Most of the remaining datacenter providers in Canada have aging infrastructure or small amounts of space.
The short supply in Canada seems to have driven up prices for hosted services companies. Consequently, we understand that the sale of Pivot was a competitive process, bringing out bids from other strategic, as well as financial, acquirers. We hear the company is being valued close to BLACKIRON, which Rogers bought for 15.1x 12 month-trailing EBITDA.
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