What are the potential synergies or cost savings from focusing on core connectivity services after the sale?

Synergies & Cost Savings

By divesting the non‑core data‑centre portfolio, Rogers can double‑down on its high‑margin connectivity franchise (fiber, mobile back‑haul, wholesale IP). The transaction removes a capital‑intensive asset class that requires ongoing cap‑ex for power, cooling and security, freeing up cash flow that can be redeployed into network upgrades, 5G roll‑out and fiber‑to‑the‑home expansion. Consolidating operations around a single service line simplifies vendor management, reduces overlapping corporate overhead (e.g., finance, HR, IT), and enables economies of scale in procurement of fiber‑optic components and wholesale bandwidth. Moreover, retaining “connectivity‑and‑data‑centre services into the facilities” creates a captive revenue stream—Rogers can sell wholesale transport into the sold‑off centres at premium, essentially converting an expensive asset into a lean, recurring‑revenue business.

Trading Implications

The market typically rewards such a refocus with a higher EBITDA multiple because the remaining business is less capital‑heavy and more predictable. Expect a modest re‑rating of Rogers’ (RCI) valuation multiples (EV/EBITDA may lift 0.1–0.2x) and an upside in the share price if the company can quickly demonstrate improved cash conversion and accelerated debt reduction. From a technical standpoint, the stock is likely to respect the recent breakout level around the 50‑day moving average; a retest of that level with volume could be a buying opportunity. Conversely, watch for execution risk—if the transition stalls or the wholesale connectivity market softens, the upside could be capped. In sum, the core‑connectivity focus offers clear margin expansion and cash‑flow benefits, which should be priced in over the next 4‑6 weeks, presenting a bullish bias for the stock with a target of 2‑3 % above current levels, provided volume confirms the move.