BCE, Ontario Teachers to Purchase Q9 Networks for C$1.1 Billion

BCE Inc. (BCE), Canada’s largest telecommunications operator, and an investor group including the Ontario Teachers’ Pension Plan said it will acquire data-center operator Q9 Networks Inc. for C$1.1 billion (US$1.06 billion).

The pension plan, along with Providence Equity Partners and Madison Dearborn Partners LLC, will contribute C$420 million of the equity funding, the group said today in a statement. BCE will provide the remaining C$180 million.

The purchase adds to a buying spree by 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.

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 to buy Astral Media Inc. for C$3 billion in March.

Ontario Teachers’ is Canada’s third-biggest retirement fund manager, with C$117 billion of assets as of Dec. 31.

The group said a portion of the transaction, which is expected to close before year-end, will be funded through new debt.

Q9, which runs 11 data centers in Alberta, British Columbia and Ontario, 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.

Another Sale

Abry also is exploring a sale of 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, may be worth about $1.4 billion, one of the people said.

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; Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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