Cogeco Peer 1, a provider of colocation, network connectivity and managed services, will become a standalone business following its sale to Digital Colony, which is dedicated to strategic opportunities in digital infrastructure. The company will remain headquartered in Toronto and adopt a new brand.
“We are grateful for the support and resources Cogeco Communications has provided as we established a strong fibre footprint in Canada’s two largest cities, and served customers across the globe with secure enterprise data centre solutions,” said Susan Bowen, CEO of Cogeco Peer 1.
“As we enter our next phase of growth as a standalone company, we will continue to focus on meeting the needs of customers while looking for new ways to innovate and deliver the digital infrastructure solutions they need. We are excited to work with Digital Colony, whose deep knowledge and experience, strong balance sheet and successful track record in the sector will be invaluable as we scale and enter a new era of digital communication.”
Cogeco Peer 1’s portfolio includes over 3,300 route km of owned, dense metro fibre in greater Toronto and Montreal. The company also owns and operates 16 data centres and more than 50 points of presence (PoPs) across North America and Europe which serve a global blue-chip customer base.
New fibre and data centre divisions
As a standalone business, Cogeco Peer 1 will have a fibre division and a data centre division in order to assume focus on meeting the needs of customers in each market.
The company says its fibre division will be Canada’s “first independent, neutral-host provider of small cell and 5G infrastructure and enterprise and wholesale fibre connectivity”. The company’s data centre division will concentrate on enabling multi-cloud services for enterprises while reinforcing its aim to be a leading hybrid-solutions managed service provider.
“Cogeco Peer 1 is poised for continued success and growth as changes in the sector, including increased demand for connectivity, drive digital infrastructure spending in Canada. We look forward to investing in the company, the team and the network assets to continue to build the business and unlock value by providing exceptional solutions to their customers,” said Marc Ganzi, managing partner of Florida-based Digital Colony, which was launched in 2018 by Digital Bridge Holdings and Colony Capital.
As part of this transaction, Cogeco Communications will retain significant fibre capacity in Toronto and Montréal. In addition, Cogeco Communications and Digital Colony have signed a commercial agreement aimed at better supporting their customers and further developing their respective businesses in the future.
Cogeco Communications plans to use a significant portion of the net proceeds from this sale to repay amounts outstanding under its term revolving facility
“Since Cogeco Communications acquired Peer 1 Hosting in 2013, the data centre and connectivity markets have evolved and consolidated significantly. In this context, we made the decision to focus Cogeco Communications’ resources on our Canadian and American broadband services businesses. This transaction will provide greater flexibility to pursue organic investment and acquisition opportunities,” said Philippe Jetté, president and chief executive officer of Cogeco Communications.
Jetté added: “On behalf of Cogeco Communications, I would like to personally thank the entire Cogeco Peer 1 team which has been dedicated to partnering with and working tirelessly for its customers around the world. We are confident that Cogeco Peer 1’s customers and employees will benefit from the support and expertise that Digital Colony can offer them.”
Some Cogeco developments over the years has seen the company spend a total of $24 million for residual spectrum licences in the 700MHz, 2500MHz, 2300MHz and PCS-G bands, join a blockchain network operated by DigitalBits so that its customers can use the distributed blockchain technology, and complete the $1.4 billion MetroCast acquisition after its Atlantic Broadband deal.
The Digital Colony transaction, which is subject to customary closing conditions, is expected to close during Q2 2019.
