Cogeco has completed the acquisition of web hosting provider PEER 1 Hosting
Canadian cable giant Cogeco has completed the acquisition of web hosting provider PEER 1 Hosting after the conditions of its offer were met.
According to the press release, Cogeco will acquire all of the issued and outstanding common shares for $3.85 per share. The offer was accepted by holders of more than 90 percent of the issued and outstanding common shares, so Cogeco Cable will take control of PEER 1′s board of directors and operations.
The $526 million deal was announced at the end of December 2012 for Cogeco to expand its range of managed services across Canada, as well as in the US and Europe. According to Structure Research managing director Phil Shih the deal is mostly about Cogeco making a stronger push into managed hosting in Canada.
WHIR blogger Tom Millitzer said the acquisition will see 20-25 percent of Cogeco’s revenues coming from “Internet enterprise-centric sources.”
The acquisition will also help Cogeco expand its data center footprint across 19 PEER 1 data centers. Cogeco recently announced that it would invest $100 million in building a new 100,000 square foot data center in Montreal.
“We are fully committed to implementing our growth strategy in the data center services sector and to further develop our robust service suite for businesses across Canada, the US and parts of Europe,” Louis Audet, president and CEO of Cogeco Cable said in a statement. “PEER 1, along with Cogeco Cable’s subsidiary Cogeco Data Services, will focus on delivering a seamless solution for our customers’ increasingly sophisticated and complex needs. The infrastructure and expertise of both organizations provides us with the scale and scope to maximize potential growth in the enterprise services market.”
“This transaction opens new possibilities for our customers, management and employees,” said Fabio Banducci, President and CEO of PEER 1. “Similar to Cogeco Cable and its subsidiaries, PEER1 strives to provide exceptional customer service and deliver technological excellence to our customers.”
Cogeco has entered into secured revolving credit facilities in the amount of the Canadian equivalent of $250 million as well as secured term credit facilities in the amount of the Canadian equivalent of $400 million, both having a maturity of four years.
Talk back: What do you think is the driver behind Cogeco’s PEER 1 acquisition? How do you think this type of acquisition impacts the broader hosting market? Let us know in a comment.
About Nicole Henderson
Nicole Henderson is the Editor in Chief of the Web Host Industry Review where she covers daily news and features online, as well as in print. She has a bachelor of journalism from Ryerson University in Toronto. You can find her on Twitter @NicoleHenderson.
