Cogeco Cable to buy PEER 1 for $532 million to boost cloud computing
US-COGECO-PEER1:Cogeco Cable to buy PEER 1 for $532 million to boost cloud computing
(Reuters) - Cogeco Cable Inc, the main unit of media and telecom company Cogeco Inc, said it would buy PEER 1 Network Enterprises Inc for about C$526 million ($532 million) to expand its cloud computing and data hosting services.
Montreal-based Cogeco Cable, which provides cable-TV, high-speed internet and telephone services, offered C$3.85 for each PEER 1 share. The offer is at a premium of 30.5 percent to PEER 1 stock's Thursday close.
Cogeco Cable said it would add 19 PEER 1 data centers to the six it operates.
Cogeco Cable's data hosting business is expected to rise 10 percent per year organically, the company said in its annual report earlier this year.
Vancouver-based PEER 1 is an internet infrastructure provider and specializes in managed hosting, dedicated servers, cloud services and co-location.
National Bank Financial advised Cogeco Cable on this deal.
The offer will be open for acceptance for 35 days. Cogeco Cable said it was financing the transaction through available resources.
PEER 1 shares closed at C$2.95 on the Toronto Stock Exchange on Thursday. Cogeco Cable's shares, which have lost 13 percent of their value over the last six months, closed at C$40.97.
(Reporting by Maneesha Tiwari in Bangalore; Editing by Don Sebastian)