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Press release from Marketwire

TeraGo Networks to Acquire Data Centers Canada

Thursday, May 23, 2013

TeraGo Networks to Acquire Data Centers Canada

07:00 EDT Thursday, May 23, 2013

TORONTO, ONTARIO--(Marketwired - May 23, 2013) - TeraGo Inc. (TSX:TGO) (www.terago.ca), a leading national broadband services provider to businesses in Canada, has entered into a definitive share purchase agreement to acquire Data Centers Canada Inc.

Data Centers Canada operates a 16,000 square foot SSAE 16 certified data centre facility in Vaughan, Ontario, and provides data centre solutions, including colocation and disaster recovery, to businesses, enterprises, public sector and technology service providers. The deal is expected to close on May 31, 2013, subject to satisfaction of customary closing conditions.

The purchase price is expected to be approximately $9,500,000, subject to any purchase price adjustments, and will be payable in cash instalments.

Data Centers Canada's operations and management team will continue on with the Company to ensure a smooth transition.

"Acquiring Data Centers Canada will support our initiative to offer complementary services," says Bryan Boyd, President and Chief Executive Officer, TeraGo Networks Inc. "This is a positive step toward our continued growth and will enable us to provide services that our customers require to do business."

"We are excited Data Centers Canada will be joining TeraGo Networks," noted Tony Di Benedetto, Co-Founder and Managing Partner, Data Centers Canada Inc. "TeraGo has a great reputation and we are confident that the synergies TeraGo brings will enhance the value proposition of both Data Centers Canada and TeraGo to our combined customer base."

Acquisition Highlights

  • The acquisition supports TeraGo's strategic plan in offering complementary services to business and enterprise customers.
  • Data Centers Canada is generating positive EBITDA and Net Income and currently has 165 contracted customers occupying 207 racks.
  • Data Centers Canada currently has four primary market segments: Business; Enterprise; Government and Technology Service Providers.

About TeraGo Networks

TeraGo Networks Inc. provides businesses across Canada with carrier-grade broadband, data and voice communications services. The national service provider owns and manages its IP network servicing 6,581 customer locations in 46 major markets across Canada including Toronto, Montreal, Calgary, Edmonton, Vancouver and Winnipeg. TeraGo Networks is a Competitive Local Exchange Carrier (CLEC) and is a wholly owned subsidiary of TeraGo Inc. (TSX:TGO). More information about TeraGo is available at www.terago.ca.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
TeraGo Networks Inc.
Investor Relations
1.866.837.2461
media@terago.ca
www.terago.ca

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