Rogers Communications Inc. RCI-B-T has signed a deal to sell nine data centres to InfraRed Capital Partners as part of its plan to divest itself of non-core assets and pay down debt, deviating from its rivals’ strategies to double down on business-to-business data centre offerings.
The Toronto-based telecom and media company did not disclose the terms of the deal, but in a note to investors Thursday morning Bank of Montreal analyst Tim Casey said he expects proceeds of about $200-million for the data centres and a small dilution to Rogers’ earnings before interest, taxes, depreciation and amortization.
National Bank of Canada analyst Adam Shine also estimated the deal to be worth $200-million.
“The transaction announced today will mark the first step in this process, with ongoing efforts to sell certain real estate likely to take more time and evolve over the next two or more years subject to market conditions,” he said in a Thursday morning memo.
InfraRed is part of SLC Management, the asset management business of Sun Life Financial Inc. SLF-T.
The deal is expected to close by the end of this year, subject to regulatory approval.
It is part of Rogers’ plans to sell $1-billion in non-core assets, including part of its real estate portfolio, in order to reduce leverage. As of the end of its last quarter, the company had $40.8-billion in long-term debt.
Rogers will continue to sell data centre services on behalf of InfraRed and will provide network connectivity to the data centres. The transaction does not include Rogers corporate data centres used for the company’s network and IT purposes.
In a release, InfraRed said it would invest in Rogers’ nine Tier 2 and 3 data centres to capitalize on the rising demand for secure data centre services.
“This investment represents an exciting opportunity for us to drive value in an established business,” said InfraRed partner Pilar Banegas.
In the wake of U.S. President Donald Trump’s use of tariffs and economic coercion, there is increased concern about relying on U.S. tech companies for crucial digital services such as artificial intelligence and cloud computing. Telus Corp. and Bell Canada parent BCE Inc. recently announced new investments to offer those services domestically.
In March, Telus said it would start operating AI data centres and sell access to Canadian companies that want to build and run AI models, a market that is dominated by U.S. tech giants such as Microsoft Corp., Google Inc. and Amazon.com. Telus is partnering with semiconductor manufacturer Nvidia Corp. to upgrade the compute power of its data centres and Canadian software company Open Text Corp. to offer AI services.
In May, Bell said it would open six data centres in British Columbia equipped to power AI models and applications, just a few years after it sold off a group of data facilities. The company announced a partnership with Canadian AI company Cohere Inc. to sell large language model software to Bell’s enterprise and government customers.
Instead of data centres, Rogers has been focusing on its sports assets, recently closing a $4.7-billion deal to acquire Bell’s stake in Maple Leaf Sports & Entertainment. The company’s executives have said it is in talks to bring in investors for its sports portfolio, which it says is worth $15-billion.