The Trend Continues – Rogers Acquires BLACKIRON Data

Another acquisition that implies Canada’s telecoms see their future growth rooted in the commercial sector.

| More on:
The Motley Fool

The continuation of an emerging trend continued yesterday with Rogers (TSX:RCI.B,NYSE:RCI) announcing the purchase of BLACKIRON Data from Primus Telecommunications.

BLACKIRON is a data centre and cloud computing provider with 4,000 customers and 132 employees.  The company generated sales of $34 million in 2012.  Rogers paid $200 million or about 6 times sales to complete the deal.

The acquisition has more strategic significance than it does financial.  After all, Rogers has more money tied up in its 3 top players on the Blue Jays than it paid to acquire BLACKIRON.

The strategic takeaway is that the Canadian telecom players are increasingly turning to the country’s commercial sector for growth.  This is a change from their historical model that saw them grow by forcing more services upon their extensive consumer base.

One of the gang

The Rogers deal is the fourth that points to this strategic shift.

The deal that seemingly got the ball rolling occurred last fall when BCE (TSX:BCE,NYSE:BCE) was part of a consortium that acquired Q9 Networks, Canada’s leading provider of outsourced data solutions.  BCE’s share of the $1.1 billion transaction was $185 million.

Regional player Cogeco Cable (TSX:CCA) got into the act when it announced a deal in December to acquire Vancouver based Peer 1 Network Enterprises.  This $526 million transaction bought Cogeco a seat at the cloud computing table.

And, just a few weeks ago Shaw Communications (TSX:SJR.B,NYSE:SJR) upped its exposure to commercial services when it announced the $200 million acquisition of ENMAX Envision, the owner of an extensive commercial fibre optic network in Calgary.

Foolish Takeaway

Just like a good investor, the corporations that thrive over the long-term are the ones that successfully prepare for the future.  All four of these transactions indicate that these companies are laying the groundwork for their respective visions of the future.  Seemingly, the vision for each involves less consumer exposure, the business that has made them into what they are, and more involvement with this country’s commercial sector.

Canada’s telecom sector is full of great dividend payers but there are only a handful of names to choose from and diversification is slim.  We have created a special report that will eliminate this diversification issue and fill your portfolio with a wide range of equally great dividend stocks.  Simply click here to receive “13 High-Yielding Stocks to Buy Today”.  This report is absolutely FREE and will have you rolling in dividend cheques before you know it.  You are just one click away from dividend nirvana!

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

edit Jars of marijuana
Cannabis Stocks

Is Tilray Stock a Buy in the New Bullish Market?

Canadian cannabis producer Tilray has underperformed the broader markets in the last five years due to its weak fundamentals.

Read more »

Woman has an idea

3 No-Brainer Stocks to Buy With $200 Right Now

These three stocks are no-brainer buys, given their solid underlying businesses and healthy growth prospects.

Read more »


2 Stocks I’m Loading Up on in 2024

Alimentation Couche-Tard (TSX:ATD) and another stock that are getting too cheap after their latest corrections.

Read more »

grow money, wealth build
Dividend Stocks

1 Top Dividend Stock That Can Handle Any Kind of Market (Even Corrections)

While most dividend aristocrats can maintain their payouts during weak markets, very few can maintain a healthy valuation or bounce…

Read more »

Red siren flashing
Dividend Stocks

Income Alert: These Stocks Just Raised Their Dividends

Three established dividend-payers from different sectors are compelling investment opportunities for income-focused investors.

Read more »

online shopping
Tech Stocks

1 Hidden Catalyst That Could Ignite Shopify Stock

Here's why Shopify (TSX:SHOP) ought to remain a top growth stock investors continue to focus on for the long haul.

Read more »

Oil pumps against sunset
Energy Stocks

Is it Too Late to Buy Enbridge Stock?

Besides its juicy and sustainable dividends, Enbridge’s improving long-term growth prospects make it a reliable stock to hold for the…

Read more »

Man considering whether to sell or buy
Tech Stocks

WELL Stock: Buy, Sell, or Hold?

WELL stock has a lot of upside as the company is likely to continue to grow, posting positive earnings in…

Read more »