Rogers to Expand Data Center Capabilities
Rogers Communications (NYSE: RCI – $43.79) announced it is acquiring Pivot Data Centres for cash consideration of $155 million and Granite Networks for $6.25 million in cash. These two acquisitions, combined with the acquisition of BLACKIRON Data earlier this year, position Rogers Business Solutions (RBS) as a leader in data center and hosting services. Together, these two businesses currently generate annualized revenues of about C$30 million. According to the announcement, both Pivot Data Centres and Granite Networks offer RBS “unique opportunities to acquire established data centre businesses with significant expansion capacity in prime markets for these services”. The addition of two new operations will enable Rogers to expand the availability of its leading-edge data services. Data centers and associated services provided by Pivot and Granite Networks are planned to bring a high growth and complementary business to Rogers’ Business Solutions division. With these acquisitions, BLACKIRON Data will own and operate data centers in Ottawa, Toronto, Edmonton and Calgary that will meet Uptime Institute’s Tier III standards. Although RCI is still under pressure from Canadian regulators pushing for more wireless competition, the diversified telecom and media company can continue to be held for its long-term recovery potential and 3.8% dividend yield.