Shaw Communications' ViaWest To Be Acquired By Peak 10 For $1.675 Bln

(RTTNews) - Peak 10 Inc., a portfolio company of GI Partners, and ViaWest Inc., a wholly-owned subsidiary of Shaw Communications Inc. (SJR_B.TO, SJR, SJR_A.TO), said that they reached a definitive agreement by which ViaWest will be acquired by Peak 10 for all-cash consideration of US$1.675 billion and the companies will combine.

GI Partners, a former investor in ViaWest, acquired Peak 10 in 2014 and will remain the majority shareholder of the combined company, Peak 10 said.

Shaw noted that the purchase price of about C$2.3 billion or US$1.675 billion, represents an attractive return on Shaw's original investment of US$1.2 billion, or about C$1.3 billion at the prevailing exchange rate at the time. Consideration pursuant to the ViaWest Transaction is comprised of all cash.

Shaw expects to realize net cash proceeds from the ViaWest Transaction of approximately C$900 million after the repayment of ViaWest level indebtedness of approximately US$580 million, repayment of the US$380 million Shaw credit facility borrowings associated with the original investment and subsequent INetU acquisition, and estimated ViaWest Transaction expenses and taxes.

The ViaWest Transaction is subject to customary conditions, including U.S. regulatory approval and is expected to close by the end of fiscal 2017.

Separately, Shaw Communications announced that it has entered into a definitive agreement with Quebecor Media Inc. to acquire 700 MHz and 2500 MHz wireless spectrum licences for $430 million.

The spectrum licences being acquired comprise the 10 MHz licences of 700 MHz spectrum in each of British Columbia, Alberta, and Southern Ontario, as well as the 20 MHz licences of 2500 MHz spectrum in each of Vancouver, Edmonton, Calgary, and Toronto.

Shaw noted that the Transaction will be funded using a combination of cash on hand and Shaw's existing credit facility. The deal is expected to close in the Summer of 2017.