CALGARY, ALBERTA, CANADA and DENVER, COLO.—Shaw Communications and ViaWest announced an agreement under which Shaw will acquire a 100 percent interest in ViaWest from Oak Hill Capital Partners and other shareholders for an enterprise value of US$1.2 billion.
Based in Denver, ViaWest is said to be one of the largest privately held provider of data center infrastructure, cloud technology and managed IT solutions in North America. ViaWest employs more than 350 people and has more than 1,300 customers across seven states. The company had a 15 percent compounded annual growth rate of revenue and EBITDA between 2010 and 2013 generated by recurring revenue from long-term contracts. Over the last decade, ViaWest has grown from five data centers in two markets to 27 data centers with more than 630,000 square feet of usable raised floor space in eight key Western U.S. markets, including Denver, Dallas, Austin, Salt Lake City, Las Vegas, Portland, Minneapolis and Phoenix. Shaw said ViaWest has significant growth prospects, with 70 percent utilization in its existing facilities and substantial expansion capacity at its new Denver, Las Vegas and Minneapolis properties.
“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,” CEO Brad Shaw said.
The current management team, led by co-founder, president and CEO, Nancy Phillips, will continue to operate ViaWest from its Denver headquarters as a stand-alone wholly owned subsidiary of Shaw.
The acquisition is expected to close in September 2014 and is subject to U.S. regulatory approval. The purchase price of US$1.2 billion represents a multiple of approximately 13x adjusted EBITDA annualized for the three months ended June 30, 2014. The transaction will be funded using a combination of cash on hand and Shaw’s existing credit facility and will have no material effect on Shaw’s free cash flow. Considering Shaw’s cash flow and the acquisition of ViaWest, Shaw’s board confirms its previously disclosed target dividend increase of 5 percent to 10 percent in fiscal 2015.
Under the terms of the agreement, majority investor Oak Hill, along with GI Partners and the company’s other current shareholders, will sell their interests in ViaWest to Shaw. TD Securities Inc. is financial advisor and Davies Ward Phillips & Vineberg LLP and Simpson Thacher & Bartlett LLP are legal advisors to Shaw. RBC Capital Markets LLC is financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP are providing legal advice to ViaWest.
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