ViaWest, one of the largest colocation providers in North America, has agreed to be acquired by Shaw Communications, a telecom company traded on the Toronto and New York stock exchanges. Under the agreement, Shaw will acquire a 100% interest in ViaWest from Oak Hill Capital Partners and other shareholders for $1.2 billion.
Based in Denver, ViaWest provides colocation services, cloud technology and managed IT solutions. The company employs over 350 people and serves more than 1,300 customers across seven states.
The acquisition is expected to close in September 2014 and is subject to U.S. regulatory approval. The purchase price of $1.2 billion represents a multiple of approximately 13X adjusted EBITDA annualized for the three months ended June 30, 2014. 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.
ViaWest has a strong record of financial growth with a 15 percent compounded annual growth rate (“CAGR”) of revenue and EBITDA between 2010 and 2013 generated mainly by recurring revenue from long-term contracts and customer retention.
Over the last decade, ViaWest has grown from five data centers in two markets to 27 data centers (with over 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.The company has significant growth prospects, according to an official statement by Shaw and ViaWest, with 70% utilization in ViaWest’s existing colocation facilities and substantial expansion capacity at its new Denver, Las Vegas and Minneapolis data center properties.
“We identified the data center sector as an attractive opportunity adjacent to our core business and with the acquisition of ViaWest, Shaw gains significant capabilities, scale and immediate expertise in the growing marketplace for enterprise data services,” said Chief Executive Officer, Brad Shaw. “We plan to leverage the ViaWest management team’s experience to accelerate the development of our Canadian data center platform so that over time our Western Canadian customers will gain access to this industry-leading expertise for their own data management needs and scalable cloud hosting solutions.”
The current management team, led by Co-Founder, President & Chief Executive Officer Nancy Phillips, will continue to operate ViaWest from its Denver headquarters as a stand-alone wholly-owned subsidiary of Shaw.
“This is an excellent strategic development for ViaWest, our employees and our customers,” said Ms. Phillips. “With Shaw Communications’ long-term commitment, we will have the stability and shared entrepreneurial culture to enter into a new phase of growth and meet the expanding technology needs of mid-market enterprises, while maintaining our commitment to exceptional customer service.”