CALGARY – Shaw Communications has sold off its Denver-based subsidiary ViaWest Inc. for approximately C$2.3 billion (US$1.675 billion) to GI Partners portfolio company Peak 10 Holding Corporation.
The deal is subject to customary conditions, including U.S. regulatory approval, and is expected to close by the end of the company’s fiscal 2017 year-end in August. It is not subject to a financing condition.
ViaWest provides hybrid IT solutions, including colocation, cloud computing and security and compliance for North American enterprises. Shaw, which bought ViaWest in 2014 for US$1.2 billion, said that it expects to realize net cash proceeds of approximately C$900 million after the repayment of ViaWest level indebtedness of approximately US$580 million, repayment of the US$380 million Shaw credit facility borrowings associated with the original investment and subsequent INetU acquisition, and estimated ViaWest Transaction expenses and taxes.
Shaw added that proceeds from the sale will help it to fund its purchase of seven spectrum licences from Quebecor-owned Videotron, announced earlier on Tuesday.
Shaw CEO Brad Shaw said that the outlook for ViaWest remains robust, though noted that the North American colocation and managed services industry is consolidating and that “scale is becoming an important factor for continued long-term success.”
“We will continue to partner with the new entity to leverage its combined expertise and scale to provide our Western Canadian data centre customers with greater innovation and breadth of services, which is consistent with our best-in-class partner-led approach," he said in the announcement.
"The combination of ViaWest and Peak 10 creates the largest privately held and most respected provider of data centre infrastructure, cloud technology and managed IT solutions in North America with a national footprint," added ViaWest president and CEO Nancy Phillips. "We believe that bringing together these hybrid IT infrastructure companies strengthens ViaWest's position among its competitors and, as a combined entity, will be able to further leverage and maximize growth opportunities."
