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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.

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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.

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.

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