* To pay C$3.85 for each Peer 1 share; a 30.5 pct premium
* Offer will be open for 35 days
Dec 21 Cogeco Cable Inc, the main unit
of media and telecom company Cogeco Inc, will buy Peer
1 Network Enterprises Inc for about C$526 million ($532
million) to expand its cloud computing and data hosting
Cogeco Cable, which provides cable-TV, high-speed internet
and telephone services, has been looking to increase its
presence in the fast-growing data-center business due to tough
competition in signing up new television customers in Canada.
The Montreal-based company, which competes with Rogers
Communications Inc and Telus Corp, bought cable
operator Atlantic Broadband for $1.36 billion earlier this year
to gain a foothold in the larger U.S. market.
Through the acquisition of Peer 1, Cogeco Cable will add 19
data centers to the six it operates as demand for web hosting
services rises mainly from small and mid-sized businesses.
Data centers house large-capacity server computers and
data-storage systems which are connected to the Internet via
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. Its customers include
Wordpress.com and Virgin Gaming.
Cogeco Cable offered C$3.85 for each Peer 1 share, which
represents a premium of 30.5 percent to Peer 1 stock's closing
price on Thursday.
The offer will be open for 35 days, and Cogeco Cable will
receive a termination fee of C$18.5 million if the deal is not
Cogeco Cable was advised by National Bank Financial.
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.