Summary:
The company said on Tuesday that Rogers Communications Inc. has acquired Ontario telecom operator Atria Networks LP for $425-million in cash. This deal brings Rogers, the giant, Toronto-based communications, fiber-optic cables that they can use to transmit data over longer distances and at faster speeds. This means that they now can reach the country's most populous province and a group of clients that consists of a wide range of customers from enterprises, public-sectors to small or medium-sized business customers. Rogers is currently buying Atria from Birch Hill Equity Partners, which has bought the operator in 2006. At first, analysts predicted Atria’s value to be near $300-million, but it turned out to be worth $425-million. This acquisition has brought intensification in competition for telecom services in Canada, but specifically in Ontario, as more competitors are entering the wireless market, as well as old rivals creating more product offerings to maintain and expand their market share. In order for Rogers to raise enough money for this transaction, they have raised another $900-million in debt to refinance their long-term debt. This with their cash on hand will leave them with around $600-million which is more than enough money for Rogers to complete this deal for Atria.
The company said on Tuesday that Rogers Communications Inc. has acquired Ontario telecom operator Atria Networks LP for $425-million in cash. This deal brings Rogers, the giant, Toronto-based communications, fiber-optic cables that they can use to transmit data over longer distances and at faster speeds. This means that they now can reach the country's most populous province and a group of clients that consists of a wide range of customers from enterprises, public-sectors to small or medium-sized business customers. Rogers is currently buying Atria from Birch Hill Equity Partners, which has bought the operator in 2006. At first, analysts predicted Atria’s value to be near $300-million, but it turned out to be worth $425-million. This acquisition has brought intensification in competition for telecom services in Canada, but specifically in Ontario, as more competitors are entering the wireless market, as well as old rivals creating more product offerings to maintain and expand their market share. In order for Rogers to raise enough money for this transaction, they have raised another $900-million in debt to refinance their long-term debt. This with their cash on hand will leave them with around $600-million which is more than enough money for Rogers to complete this deal for Atria.
Connections:
This piece of news can be connected to what we have learned from our textbook’s chapter one. This article connects to the concepts of investment and financial activities. Rogers Communications Inc. plans to invest their finances into the Atria Networks to further ensure that their customers will be able to transmit and receive data at a much faster speed and at a farther range. Rogers decided to invest into Atria because this will enhance their abilities to transmit data by a lot. This article also connects to finance activities because in order for Rogers Communications to acquire enough money for this deal, they have to increase their long-term debt, which will allow Rogers to obtain more than enough money for this deal.
This piece of news can be connected to what we have learned from our textbook’s chapter one. This article connects to the concepts of investment and financial activities. Rogers Communications Inc. plans to invest their finances into the Atria Networks to further ensure that their customers will be able to transmit and receive data at a much faster speed and at a farther range. Rogers decided to invest into Atria because this will enhance their abilities to transmit data by a lot. This article also connects to finance activities because in order for Rogers Communications to acquire enough money for this deal, they have to increase their long-term debt, which will allow Rogers to obtain more than enough money for this deal.
Reflections:
In my opinion, I believe that the fact that Rogers is increasing their abilities to transmit data globally will help the entire country is connecting with each other. This deal will increase Rogers’ number of clients, but in order to do so, they needed to increase their debt to obtain the money for the deal. I think that this is the only bad point within this deal. Increasing their debt for the only reason of purchasing Atria Networks is something that I believe to be not a smart choice. Although having Atria Networks within Rogers will increase their data transmitting capabilities, Rogers now has an even larger amount of debt that they will have to eventually repay.
In my opinion, I believe that the fact that Rogers is increasing their abilities to transmit data globally will help the entire country is connecting with each other. This deal will increase Rogers’ number of clients, but in order to do so, they needed to increase their debt to obtain the money for the deal. I think that this is the only bad point within this deal. Increasing their debt for the only reason of purchasing Atria Networks is something that I believe to be not a smart choice. Although having Atria Networks within Rogers will increase their data transmitting capabilities, Rogers now has an even larger amount of debt that they will have to eventually repay.
