Canada's Shaw Communications has become the latest operator to exit the data centre business, via the sale of its unit ViaWest to Peak 10, while also announcing increased investment in its mobile business. The cable and media group will sell ViaWest for CAD 2.3 billion (USD 1.675 billion) cash. GI Partners, which acquired Peak 10 in 2014, was previously an investor in ViaWest.
Shaw bought ViaWest in 2014 and said it's seen the business grow quickly, with strong results. To further the growth in a consolidating industry, ViaWest needs increased scale, which it should find with Peak 10. The merger is expected to create the largest privately held provider of data centre infrastructure, cloud technology and managed IT services in North America with a national footprint, said ViaWest CEO Nancy Phillips, who will stay with the company as chairman after the takeover.
Shaw customers in western Canada will continue to benefit from access to Viawest services. In addition, the company books a return on its initial USD 1.2 billion purchase price, equal to CAD 1.3 billion at today's exchange rates. The company expects net proceeds of CAD 900 million after paying of ViaWest debt of USD 580 million and Shaw credit facility borrowings of USD 380 million associated with the original takeover. Subject to regulatory approval, the sale is expected to close by the end of Shaw's current fiscal year in August.
Shaw Communications announced separately that it's agreed to acquire 700 MHz and 2,500 MHz wireless spectrum licences for CAD 430 million from Quebecor. This includes 10 MHz of 700 MHz spectrum in British Columbia, Alberta and Southern Ontario, as well as 20 MHz of 2,500 MHz spectrum in Vancouver, Edmonton, Calgary, and Toronto. The addition of 700 MHz spectrum is expected to provide a boost to Shaw's mobile business, which has been growing quickly since it acquired Wind Mobile last year.
Quebecor meanwhile has decided to focus its mobile business on its Videotron cable footprint in Quebec and Eastern Ontario. In addition to the sale to Shaw, the company agreed to sell Videotron’s Advanced Wireless Services (AWS-1) spectrum licence in the Greater Toronto region to Rogers Communications for CAD 184 million, pursuant to the transfer option held by Videotron since 2013. The Rogers sale will close in the coming days, while the Shaw deal should be completed this summer.
