OTPP in C$1.1bn data centre club deal

The Ontario Teachers’ Pension Plan, Providence Equity Partners and Madison Dearborn Partners combined to contribute C$420m in equity for Canadian data centre Q9 Networks.

The Ontario Teachers’ Pension Plan has joined with Providence Equity Partners and Madison Dearborn Partners to acquire Canadian data centre operator Q9 Networks for C$1.1 billion (€845 million; $1.06 billion), according to a statement. The deal is subject to regulatory approval and is expected to close by the end of 2012. 

Ontario Teachers’, Providence and Madison Dearborn will contribute C$420 million in equity for the deal, according to the statement. It is unclear how much was provided by each firm individually. 

An additional C$180 million in equity will be provided by Bell, a Canadian communications company, according to the statement. New debt financing from Q9 will also fund a portion of the deal. The company, which operates 11 data centres in Alberta, British Columbia and Ontario, will retain its current management. 

Providence and Madison Dearborn declined to comment beyond the release. An Ontario Teachers spokesperson did not respond to a request for comment. 

Ontario Teachers’ has invested directly in private equity through its private investment wing, Teachers’ Private Capital, since 1991. Teachers’ Private Capital, which maintains a $12.2 billion portfolio, has been known to partner with major private equity firms in consortium deals. In December, Ontario Teachers teamed up with Thoma Bravo to acquire online security company Blue Coat Systems for around $1.3 billion. 

The pension system also was one of several investors to go in on BTG Pactual in 2010, a Brazilian investment bank also known for its sizeable private equity business. The consortium, led by JC Flowers & Co., took a 19 percent cut of the company for around $1.8 billion. BTG raised R$3.65 billion ($1.96 billion, €1.48 billion) in an initial public offering earlier this year. 

Teachers’ Private Capital is led by Jane Rowe. The investment staff is divided by both region and sector, with teams for consumer, retail and industrials; telecom, media, technology, energy and power; financial services and healthcare; Europe, Middle East and Africa; and a Global Funds staff.