Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Louis Audet, chief executive of Cogeco Inc. (Ryan Remiorz/THE CANADIAN PRESS)
Louis Audet, chief executive of Cogeco Inc. (Ryan Remiorz/THE CANADIAN PRESS)

Cogeco to buy Internet infrastructure company for $526-million Add to ...

Cogeco Cable Inc. announced plans Friday for its second major acquisition since the summer, a friendly $526-million deal to buy Canadian Internet infrastructure provider Peer 1 Network Enterprises.

The Montreal-based cable company is offering $3.85 in cash per share – a figure that values Peer 1 Network’s equity at $526-million on a fully diluted basis.

More Related to this Story

Cogeco also says Peer 1 has an enterprise value of $635-million, after including other factors..

The offer to shareholders is 90 cents per share above Peer 1’s closing price of $2.85 Thursday on the Toronto Stock Exchange.

The company says Peer 1 gives Cogeco opportunities for growing its presence in the business segment of the Internet services market.

Cogeco attempted unsuccessfully to expand into Europe several years ago but had to pull out after major losses with an acquisition in Portugal. It has also recently ventured into the U.S. cable services market.

In July, Cogeco Cable Inc., Canada’s fourth-largest cable TV company with operations in Quebec and southern Ontario, entered the U.S. market with a $1.36-billion (U.S.) deal to buy a regional cable company Atlantic Broadband for US$1.36-billion.

Atlantic Broadband, headquartered in Quincy, Mass., is the 12th largest cable television system operator in the United States serving customers in western Pennsylvania, southern Florida, Maryland, Delaware and South Carolina.

The U.S. deal was Cogeco’s first big acquisition since its failed venture into Portugal.

Chief executive Louis Audet says Cogeco’s strategy with the latest purchase is to grow in the data centre sector.

“Peer 1 is a leading business and technology service company with talented and committed employees and long-term customer relationships,” Mr. Audet said in a statement.

Cogeco describes PEER 1, whose headquarters and primary network centres are located in Vancouver, as one of the world’s leading Internet infrastructure providers, specializing in managed hosting, dedicated servers, cloud services and colocation.

“The acquisition of PEER 1 and combining it with Cogeco Cable’s existing data centre capabilities, will increase the scale and scope by adding the capability to service an additional 10,000 businesses worldwide through 19 data centres and 21 points-of-presence across North America and Europe,” Cogeco said in a release.

Peer 1’s board of directors is supporting Cogeco’s offer, subject to their right to consider and accept superior proposals. Cogeco will have a five-day right to match a superior proposal and, under some circumstances, will receive a $18.5-million termination fee if the deal isn’t completed.

Follow us on Twitter: @GlobeInvestor

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories