Rogers Communications, Inc. (Rogers) has signed an agreement with Blackstone, supported by Canadian institutional investors, for an equity investment totaling CAD 7 billion.
Led by Blackstone, the partnership includes the Canada Pension Plan Investment Board (CPP Investments), Caisse de dépôt et placement du Québec, the Public Sector Pension Investment Board (PSP Investments), and the British Columbia Investment Management Corporation.
The transaction will focus on Blackstone’s acquisition of a new subsidiary that will hold a portion of Rogers’s wireless backhaul transport infrastructure.
Tony Staffieri, President and CEO of Rogers, highlighted, “This strategic partnership demonstrates the confidence investors have in Rogers and our world-class assets. With this significant investment, we are executing on our commitment to de-lever our balance sheet.”
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Strengthening Rogers’s Financial Position
Under the terms, Blackstone will acquire 49.9% equity interest, accompanied by a 20% voting interest. Meanwhile, Rogers will retain 50.1% ownership and 80% voting control, ensuring full operational authority over its national wireless network.
Net proceeds from the deal will primarily address Rogers’s debt reduction. Glenn Brandt, Rogers’s Chief Financial Officer, emphasized, “This transaction will strengthen the company’s investment-grade balance sheet by reducing our borrowings and unlocking the unrecognized value of our critical assets.”
Brandt further stressed that the transaction will enable Rogers to issue an aggregated USD 9 billion of equity-valued capital since year-end, which is expected to reduce leverage by almost a turn.
The subsidiary is projected to allocate up to approximately CAD 0.4 billion annually to Blackstone within the first five years after closing. Rogers expects a 7% capital cost per annum by the end of the purchase period.
The investment is expected to be classified as equity by credit rating institutions, such as Moody’s, S&P Global, and DBRS, strengthening Rogers’s financial structure.
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