Just when we were getting used to Canadian techs such as Redknee, CGI Group, Amaya Gaming and Macdonald Dettwiler buying up assets, news today from Peer 1 Networks (TSX:PIX) shows us that the dominant long term trend is a Canadian tech is big fish buying little fish.
This time, however, the little fish is staying in Canadian waters.
Peer 1 today announced that it has entered into an agreement to be acquired by Cogeco Cable (TSX:CCA) for $3.85 a share. The price is a 32.1% premium to Peer 1’s 20-day volume-weighted average share price.
Peer 1 CEO Fabio Banducci said Cogeco’s offer gets shareholders the value they were looking for.
“Cogeco Cable is a well-positioned telecommunications company in Canada, and its commitment to invest growth capital in the Internet infrastructure business and demonstrated success in serving the technology needs of enterprises makes it an ideal match for Peer 1,” said Fabio Banducci, president and CEO of Peer 1. “Both of our companies strive for exceptional customer service and technological excellence. Cogeco Cable’s offer is attractive to our shareholders, and recognizes the value and potential of our company, management and employees.”
Vancouver-based Peer 1 Networks, which was founded in 1999, provides Internet hosting services such as managed hosting, dedicated servers, and cloud computing. The company boasts more than ten-thousand customers with seventeen data centers located in Canada, the U.S. and the U.K. Peer 1 customers include household names such as Plenty of Fish, Virgin Gaming and WordPress.com. The company’s revenue has grown steadily, from $89.3-million in fiscal 2008 to the $133.6-million it reported as 2012’s topline in September.
Founded in 1957, Quebec-based Cogeco is Canada’s fourth largest cable systems operator. The company, which also owns local community TV and adult contemporary radio assets, has grown its revenue from $746.9-million in 2006 to nearly $1.3-billion in fiscal 2012, which it reported November 1st. Cogeco’s acquisition of Peer 1 follows its pickup of U.S. cable systems provider Atlantic Broadband earlier this month.
Peer 1 will circulate a A takeover bid circular shareholders on or about Dec. 24, 2012. The offer is conditional on the tendering of at least 66.6% of Peer 1 shares.
Shares of Peer 1 Networks closed today up 29.8% to $3.83.