Canadian telco Shaw Communications is to buy US data center operator ViaWest for US$1.2bn in a deal expected to close in September.
ViaWest runs 27 data centers in eight western US markets, including Denver, Dallas, Las Vegas and Minneapolis and employs 350 people to service 1,300 customers.
Shaw Communications CEO Brad Shaw said the acquisition is part of the company’s plans to expand into high-growth business areas and add to its existing business service offerings.
The company’s last acquisition, in which it paid $225m for Calgary-based fiber-optic network operator and business services provider Envision, took place in April 2013.
With a growing market for enterprise data services the telco needed to acquire new skill sets and immediate expertise, and reach a sufficient scale to compete in this market, Shaw explained.
"We plan to use the ViaWest management team’s experience to accelerate the development of our Canadian data center,” Shaw said.
Eventually, the telco’s existing Western Canadian existing customers will be introduced to its data center offerings, as the company rolls out its data management and cloud computing services.
"The ViaWest acquisition provides Shaw a growth platform in the attractive data center sector and is another significant step in expanding our technology offerings for mid-market enterprises in Western Canada, building on the growth from our 2013 Envision acquisition," said Shaw.
Under the terms of the acquisition, ViaWest's co-founder and CEO Nancy Phillips will keep her job and Shaw will retain the firm's current management team.
The company will operate as a standalone subsidiary of Shaw from its Denver headquarters.
Demand for ViaWest's services is growing rapidly, said Shaw, as it recorded significant growth in IP traffic, bandwidth intensive applications and IT outsourcing.
"This acquisition positions us at the forefront of this significant market opportunity," Shaw said.
Shaw will take 100% ownership of ViaWest's shares from shareholders including venture capital backers Oak Hill Capital Partners and GI Partners.
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