Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Robert Offley, CEO of CentriLogic, says the independent data centre operator is earmarking up to $40-million for acquisitions. (Tim Fraser for The Globe and Mail)
Robert Offley, CEO of CentriLogic, says the independent data centre operator is earmarking up to $40-million for acquisitions. (Tim Fraser for The Globe and Mail)

Technology

CentriLogic looks for acquisitions in hot data sector Add to ...

Amid an unprecedented wave of consolidation, CentriLogic, one of Canada’s largest independent data centre operators, says it is earmarking up to $40-million for acquisitions.

The privately held company is actively scouting for more takeover opportunities in cities like Ottawa, Montreal and various markets in Western Canada. Its expansion plans come at a time when Canada’s data centre market, one of the most robust growth sectors in telecom, is being transformed.

More Related to this Story

Earlier this year, Rogers Communications Inc. announced a $200-million deal to acquire Blackiron Data from Primus Telecommunications Group, while Shaw Communications Inc. snapped up Enmax Envision Inc. for roughly $225-million.

Other notable deals include the $1.1-billion purchase of Q9 Networks Inc. by an investor group led by telecom giant BCE Inc. and Cogeco Cable Inc.’s takeover of Peer 1 Network Enterprises Inc.

Telecom and cable companies are willing to pay a premium to snap up those assets because Canada’s data centre market – worth roughly $4.1-billion – is poised to grow by more than 7 per cent this year as more businesses outsource their IT support, according to consultancy IDC Canada.

CentriLogic has already embarked on a shopping spree of its own. During the first half of this year, it purchased the Capris Group, an Ontario-based IT services provider, for $9-million and a North Carolina data-centre operator, Dacentec Inc., for an undisclosed amount.

“[CentriLogic] would be prepared to invest up to $40-million for the right opportunities,” president and chief executive

officer Robert Offley said.

The company has beefed up its senior management team to help facilitate that growth. Although CentriLogic is primarily looking for deals in Canada, opportunities also exist in the United States and Europe, Mr. Offley said.

CentriLogic already operates three data facilities in Canada. It could open up to two more this year depending on its pipeline of opportunities, he said. Ottawa, for instance, is an attractive market because there is a lot of potential government business currently underserviced by data centres.

Montreal is another possibility. Other companies have shied away from that business centre because of French-language requirements, leaving an attractive opportunity for nimble providers, he said. Western Canada, meanwhile, remains desirable because of business growth spurred by its energy-based economy.

“I think you can expect us to add more [data centres] in the second half of the year,” Mr. Offley said.

When asked if there are sufficient takeover targets left in Canada, he said there are still some independents, adding that some of the best opportunities are the ones that do not go through an official sale process. “I still think there is room for growth and development of the market in Canada,” he said.

“We’re a pretty connected country and yet I think there is still latent opportunity for taking advantage of this whole digital economy.”

CentriLogic also has operations in the United States, Britain and Hong Kong.

The company’s expansion drive follows “record business results” for the first half of its fiscal 2013. Although the private company discloses only select tidbits of financial data, it said it posted year-over-year revenue growth of 77 per cent from June 30, 2012, through June 30, 2013, along with “significantly increased” EBITDA or earnings before interest, taxes, depreciation and amortization.

So far this year, its customer base has expanded to include companies like Canaccord Genuity, Preferred Mutual, Insight, Globalive, Sensee, and Intrahealth. It has also won more business from existing clients like Bausch & Lomb and Wegmans.

Follow us on Twitter: @GlobeBusiness

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular