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BCE Is Leading Group to Buy Q9 Networks, Globe and Mail Reports

BCE Inc. (BCE), Canada’s largest telecommunications operator, is leading a group that’s close to acquiring Web-services company Q9 Networks Inc. for at least C$1 billion ($960 million), the Globe and Mail reported.

Bidding on the company, which runs 11 data centers in Canada, closed last week and a deal could be announced as soon as today, the newspaper said, citing unidentified sources. The group is expected to include the Ontario Teachers’ Pension Plan and a U.S. private-equity firm, the Globe and Mail said.

The purchase would continue a buying spree for BCE, which has announced plans to acquire two TV companies and a stake in the owner of the Toronto Maple Leafs hockey team. The company is wagering that smartphone customers will increase spending on BCE’s sports and entertainment programming.

Mark Langton, a spokesman for Montreal-based BCE, declined to comment. Kevin Spikes, a Q9 spokesman, didn’t immediately return messages seeking comment.

Ontario Teachers’ is Canada’s third-biggest retirement fund manager, with C$117 billion of assets as of Dec. 31. Deborah Allan, a spokeswoman for the Toronto-based fund, didn’t immediately respond to an e-mail seeking comment.

BCE’s last three major acquisitions were valued at a total of $7.6 billion, including debt, according to data compiled by Bloomberg. Its most recent deal was for Astral Media Inc. for C$3 billion in March.

Abry Partners

Q9 helps businesses run their computing operations, working with hundreds of customers in a range of industries. The company agreed to be acquired by private-equity firm Abry Partners LLC in 2008 in a deal that valued Q9 at about $361 million.

Abry also is exploring a sale for Atlantic Broadband Inc., a cable company that it owns with Oak Hill Capital Partners, people familiar with the matter said this week. That deal, which is being managed by Credit Suisse Group AG, could be worth about $1.4 billion, one of the people said.

Royce Yudkoff, a co-founder of Boston-based Abry, didn’t immediately respond to a request for comment on the Q9 deal.

Q9 was founded in 1995 as Myna Communications, an Internet service provider and Web-hosting company. The Toronto-based company, run by Chief Executive Officer Osama Arafat, changed its name to Q9 Networks in 2000.

To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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