A group of investors led by Canada's telecommunications giant BCE Inc. on Saturday announced a deal to acquire the Toronto-based data center operator Q9 Networks for C$1.1 billion.
The consortium includes Ontario Teachers Pension Plan, Providence Equity Partners and Madison Dearborn Partners LLC. The deal was earlier reported by the Globe and Mail newspaper on Friday, which said the bidding on Q9 that operates 11 data centers across Canada closed last week.
Under the announced deal, Teachers, Providence and Madison Dearborn is to provide 70 percent, or C$420 million, of the equity funding, while BCE will contribute the remaining 30 percent, or C$180 million. A portion of the acquisition will also be funded by new debt financing by Q9.
The transaction is expected to close before the end of 2012, subject to regulatory approval and customary closing conditions, the buyers said in a joint statement.
The latest purchase adds to BCE's growing list of acquisitions this year. In March, the company bought Quebec's largest independent media company Astral Media, Inc. for about C$3.38 billion. It also completed the C$3.2 billion acquisition of Canadian television network CTV in early January to form the Bell Media business unit.
Q9 will operate as a stand-alone entity and the existing management, including Chief Executive Officer Osama Arafat and President & Chief Operating Officer Paul Sharpe will be retained.
The buyers have committed to settle the Reverse Break-Fee Proceedings initiated in 2008, which will consist of non-cash consideration. The terms will be finalized ahead of the closing of the transaction and will be part of the overall deal.
BMO Capital Markets and TD Securities were the financial advisors to Q9, while Barclays, Evercore Partners, and RBC Capital Markets are the financial advisors to the investor group.
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