Skip to main content

Brad Shaw, CEO of Shaw Communications, answers questions during a news conference at the Shaw annual meeting in Calgary, Alberta, January 14, 2014.TODD KOROL/Reuters

Shaw Communications Inc. said Thursday it plans to acquire U.S. data centre and cloud services provider ViaWest Inc. for $1. 2-billion (U.S.).

Denver, Colo.-based ViaWest is privately owned and controlled by private equity firm Oak Hill Capital Partners.

It has 350 employees and more than 1,300 customers, according to a statement from Calgary-based Shaw, which said the current ViaWest management team would continue to operate the business from Denver as a wholly owned subsidiary of Shaw.

Investing in data centres that can handle burgeoning Internet storage needs has become a growing trend for Canadian telecommunications companies.

Cogeco Cable Inc. announced plans to acquire Peer 1 for $526-million in 2012 and Rogers Communications Inc. bought Primus Telecommunications Group Inc.'s Blackiron Data for $200-million last year.

"We identified the data centre sector as an attractive opportunity adjacent to our core business and with the acquisition of ViaWest, Shaw gains significant capabilities, scale and immediate expertise in the growing marketplace for enterprise data services," Shaw chief executive officer Brad Shaw said in the statement, adding that the company plans to use ViaWest's experience to accelerate development of Canadian data centres.

Shaw said the acquisition is set to close in September and is subject to U.S. regulatory approval. It plans to fund the deal using cash and its existing credit facility and said the transaction would have no material effect on its free cash flow.

It said the purchase price of $1.2-billion (U.S.) implies a multiple of approximately 13 times adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) annualized for the three months ended June 30.

ViaWest has 27 data centres in eight Western U.S. markets.