Investor Group And Bell To Acquire Canadian Data Centre Operator Q9 Networks

Ontario Teachers, Providence Equity, Madison Dearborn and Bell partner in acquisition of leading provider in fast-growing data hosting and cloud solutions sector

TORONTO, June 2, 2012 /CNW Telbec/ - An investor group, comprising Ontario Teachers' Pension Plan (Teachers), Providence Equity Partners ( Providence) and Madison Dearborn Partners LLC ( Madison Dearborn), and BCE Inc. (Bell) today announced an agreement to acquire 100% of Canadian data centre operator Q9 Networks Inc. (Q9) for C$1.1 billion.

Under the agreement, Teachers, Providence and Madison Dearborn will contribute 70%, or C$420 million, of the equity funding and Bell will provide the remaining 30%, or C$180 million. New debt financing by Q9, already committed, will also fund a portion of the acquisition. The transaction is expected to close before the end of 2012, subject to regulatory approval and customary closing conditions.

With 11 data centres in Alberta, British Columbia and Ontario, Q9 is Canada's leading provider of outsourced data centre solutions for organizations with mission-critical IT operations. Q9 will continue to be headquartered in Toronto and operate as a stand-alone entity. Existing Q9 management will continue operating the company, including Chief Executive Officer Osama Arafat and President & Chief Operating Officer Paul Sharpe, both recognized leaders in the data centre infrastructure space.

"Q9 looks forward to working with these leading private-equity firms and Canada's largest communications company, all of which have a strong track record of growing leading-edge companies like Q9," said Osama Arafat, CEO of Q9 Networks. "They recognize the value of Q9 and its team, an exceptional Canadian company dedicated to providing organizations with highly secure and reliable data centre infrastructure services."

"Q9 is a recognized leader in data centre services for business customers large and small, an ideal partner to grow our hosting and cloud-based business while leveraging our world-leading broadband network infrastructure," said Tom Little, President of Bell Business Markets. "Bell looks forward to working with our partners and to offering our national business customer base access to Q9's hosting and co-location services while delivering Bell's broadband network solutions to Q9's extensive client roster."

"This is a unique opportunity to partner with the world-class management team at Q9 and with Bell, the leading communications provider in Canada. We look forward to supporting Q9's continued growth with Bell, and adding lasting value at the company," the investor group said in a joint statement

Bell and its consortium partners have committed to settle the Reverse Break-Fee Proceedings initiated in 2008, with terms to be finalized in advance of closing of the transaction. The break fee settlement, which will consist of non-cash consideration, will be part of the overall transaction and will be conditional upon completion of the transaction.

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