TeraGo to Acquire International Hosting Business of Ottawa-Based AirVM

TORONTO, ONTARIO--(Marketwired - May 13, 2016) - TeraGo Inc. ("TeraGo" or the "Company") (TSX:TGO) (www.terago.ca), a national provider of complete end-to-end data solutions, today announced that a definitive asset purchase agreement has been entered into, under which TeraGo Networks Inc., a wholly-owned subsidiary of TeraGo will acquire the hosting business (the "Hosting Business") currently operated and carried out by Ottawa-based AirVM Inc. The pending acquisition will bring expanded Infrastructure as a Service (Iaas) offerings to TeraGo from locations in the United States and the United Kingdom. In addition, the Hosting Business will bring with it additional talent by way of new employees joining the TeraGo team and a host of new customers and channel partners that TeraGo is eager to work with.

"The Hosting Business acquisition will facilitate our growth in the IaaS cloud business and will add new international channel partners that will enable us to further accelerate our growth, both here and abroad," says Stewart Lyons, President and CEO of TeraGo. "This acquisition gives us some international presence, and enables us to serve European and American customers with very competitively priced offerings due to foreign exchange rates. We are also excited to welcome the new employees to our Company who have previously worked to successfully build and grow the Hosting Business at AirVM."

The acquisition will be funded without accessing TeraGo's existing credit facilities and therefore offers additional financial flexibility for TeraGo to continue to pursue opportunities within its acquisition pipeline. Closing of the acquisition is expected to occur towards the end of May, 2016.

About TeraGo

TeraGo provides businesses across Canada and globally with network and voice services, data center services and enterprise infrastructure cloud services. TeraGo manages over 3,000 cloud workloads, seven data centers in the Greater Toronto Area, the Greater Vancouver Area, Ottawa, Kelowna and Winnipeg and owns and manages its own IP network. The Company serves over 4,000 business customers in 46 major markets across Canada including Toronto, Montreal, Calgary, Edmonton, Vancouver and Winnipeg. TeraGo Networks is a Competitive Local Exchange Carrier (CLEC) and was selected as one of Canada's Top Small and Medium Employers for 2015 and is recognized as a Canadian Telecommunications Employer of Choice for 2015. TeraGo Networks was also recognized by IDC as a Major Player in MarketScape Cloud Vendor Assessment.

For more information about TeraGo, please visit www.terago.ca.

Forward-Looking Statements

This press release includes certain forward-looking statements that are made as of the date hereof. Such forward-looking statements may include, but are not limited to, statements regarding accelerated growth in the IaaS cloud business, leveraging the sales network of the Hosting Business' channel partners, and future acquisitions in the Company's pipeline. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities laws. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. The forward-looking statements reflect the Company's views with respect to future events and is subject to risks, uncertainties and assumptions, including the assumption that all closing conditions set forth in the asset purchase agreement for the acquisition of the Hosting Business will be satisfied or waived by the applicable party or parties at the time of closing, the risk that the acquisition of the Hosting Business may not be accretive to the Company's existing business, revenue growth strategies may not materialize, trends in the global cloud and data centre markets may not be accurately projected, and those risks set forth in the "Risk Factors" section in our annual MD&A for the year ended December 31, 2015 available on www.sedar.com. Until all the closing conditions are satisfied or waived, there can be no assurances that the acquisition of the Hosting Business will be completed. Accordingly, readers should not place undue reliance on forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed with the forward-looking statements. Except as may be required by applicable Canadian securities laws, TeraGo does not intend, and disclaims any obligation, to update or revise any forward-looking statements whether in words, oral or written as a result of new information, future events or otherwise.