MENU

M&A Plays of the Day: Rogers Buys Pivot Data Centers

While we don’t believe in paying too much attention to buyout rumors and speculating on potential takeover targets, Fools should definitely try to keep up with M&A news that is officially announced — just in case it’s material to our investing thesis.

What: Canadian communications and media company Rogers Communications (TSX: RCI.B, NYSE:RCI) announced on Monday that it is acquiring Pivot Data Centers (operates three colocation facilities in Calgary and Edmonton) for $155 million and Granite Networks (provides cloud hosting services to business and government clients in Eastern Ontario and Western Quebec) for $6.25 million.

So what: The pair of acquisitions, combined Rogers’ buy of BLACKIRON Data earlier this year, should help strengthen the company’s position in the fast-growing data centre and hosting services business. While the total purchase is a relatively small one for giant Rogers, it’s yet another sign that management is particularly focused on increasing share in the data center space.

Now what: Given the rapidly growing demand for mobile content and cloud services, I’d expect the purchases to pay off relatively soon. “The addition of two high quality and growing data centre operations will enable Rogers Business Solutions to expand the availability of its reliable, and leading-edge data services,” said BLACKIRON President AJ Byers. “Both organizations will enhance Rogers Business Solutions BLACKIRON Data offering as customers in key markets will now have access to expanded data capacity, managed and cloud service offerings.” More importantly, with Rogers shares still down about 15% from its 52-week highs, there might be some upside available to play that data center trend.

Canada has yielded its fair share of great companies. But unsuspecting Canadian investors could get ambushed by a glaring weakness in their portfolios. One basic investing principle holds the key to a rock-solid portfolio … and it starts with our neighbors to the south, America.

That’s why The Motley Fool has put together a Special FREE Report, “3 U.S. Stocks Every Canadian Should Own.” The funny thing is, these stocks might as well be Canadian … because you use them every day. Just click here now to receive a copy at no charge!

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

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

Fool contributor Brian Pacampara doesn’t own shares in any companies mentioned.  The Motley Fool doesn’t own shares in any of the companies mentioned.

Just Released!

Motley Fool CEO Tom Gardner Goes Live and Tells Hong Kong Investors To Buy This Canadian Darling Tech Stock…

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.