Aptum Technologies: Cogeco Communications Sells Cogeco Peer 1 subsidiary to Digital Colony (PR)

Feb 27, 2019 | Posted by Eric Bell

MONTREAL, (GLOBE NEWSWIRE) -- Cogeco Communications Inc. (TSX: CCA) (“Cogeco Communications” or the “Corporation”) today announced that it has reached an agreement to sell Cogeco Peer 1 Inc., its business information and communications technology services subsidiary, to affiliates of Digital Colony, a global investment firm dedicated to strategic opportunities in digital infrastructure.

The transaction is valued at C$720 million and is subject to certain closing adjustments. The Corporation currently expects to use a significant portion of the net proceeds from this sale to repay amounts outstanding under the Corporation’s term revolving facility and, subject to the approval of the Toronto Stock Exchange, to repurchase subordinate voting shares under a normal course issuer bid to be implemented after the closing of the transaction.

As part of this transaction, Cogeco Communications will retain significant fibre capacity in Toronto and Montréal. In addition, Cogeco Communications and Digital Colony have signed a commercial agreement aimed at better supporting their customers and further developing their respective businesses in the future.

“Since Cogeco Communications acquired Peer 1 Hosting in 2013, the data centre and connectivity markets have evolved and consolidated significantly,” said Philippe Jetté, President and Chief Executive Officer of Cogeco Communications Inc. “In this context, we made the decision to focus Cogeco Communications’ resources on our Canadian and American broadband services businesses. This transaction will provide greater flexibility to pursue organic investment and acquisition opportunities.”

“On behalf of Cogeco Communications, I would like to personally thank the entire Cogeco Peer 1 team which has been dedicated to partnering with and working tirelessly for its customers around the world,” added Mr. Jetté. “We are confident that Cogeco Peer 1’s customers and employees will benefit from the support and expertise that Digital Colony can offer them.”

The completion of the transaction is subject to certain customary closing conditions, including receipt of certain regulatory approvals, and is expected to occur during the third fiscal quarter of 2019. Cogeco Peer 1 will remain headquartered in Toronto and adopt a new brand.

BMO Capital Markets is acting as the exclusive financial advisor to Cogeco Communications and Stikeman Elliott LLP is providing legal advice.

Cogeco Communications Inc. is a communications corporation. It is the 8th largest cable operator in North America, operating in Canada under the Cogeco Connexion name in Québec and Ontario, and along the East Coast of the United States under the Atlantic Broadband brand (in 11 states from Maine to Florida). Cogeco Communications Inc. provides residential and business customers with Internet, video and telephony services through its two-way broadband fibre networks. Through its subsidiary Cogeco Peer 1, Cogeco Communications Inc. provides business customers with a suite of information technology services (colocation, network connectivity, hosting, cloud and managed services), by way of its 16 data centres, extensive FastFiber Network® and more than 50 points of presence in North America and Europe. Cogeco Communications Inc.’s subordinate voting shares are listed on the Toronto Stock Exchange (TSX: CCA).