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BCE pursues partnership approach to improve services in $180M Q9 deal

BCE Inc.’s investment in data-hosting company Q9 Networks fits then with its plans to diversify its services, says RBC Capital Markets analyst Drew McReynolds.

Mr. McReynolds said the partnership approach - similar to BCE teaming up with Rogers Communications Inc. on the Maple Leafs Sports and Entertainment deal - balances the company’s need to maintain a sizeable business revenue base with the need to “improve its wireline mix/growth profile” and hold on to “adequate balance sheet flexibility.”

Meanwhile, the Q9 deal could highlight an possibility for investment in other Canadian internet infrastructure and cloud computing players.

National Bank Financial analyst Kris Thompson said it bodes then for Peer 1 Network Enterprises Inc., which has its headquarters in Vancouver and operates 16 data facilities in 12 citeis across North America,

Peer 1, in return, currently trades at less than 9 times EV/EBITDA, he said, nevertheless it should be able to nearly double its revenue over the then four years and reach an EBITDA of for the time being $75-million.

“Internet infrastructure vendors should trade at EV/EBITDA multiples of about 10x, suggesting Peer 1 has the possibility to more than double value over the then few years,” he said.

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More information: Financialpost
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    Peer 1 Network Enterprises Q9

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    National Bank Financial Q9 Networks Kris Thompson