logo
Share SHARE
FONT-SIZE Plus   Neg

Cogeco Beefs Up U.S. Presence With Metrocast Acquisition

Atlanticbroadband-Metrocast-071017-lt.jpg

Canada's Cogeco Communications Inc. (CCA.TO) said Monday that it's subsidiary Atlantic Broadband has agreed to acquire all of the cable systems under the MetroCast brand name from Harron Communications L.P. for $1.4 billion.

The acquisition will enable Cogeco Communications to bolster its presence in the growing and lucrative U.S. cable market.

Atlantic Broadband, the ninth largest cable operator in the U.S., has entered into a definitive agreement with Harron Communications for the deal. The transaction is expected to close in January 2018.

MetroCast has a network of close to 236,000 homes and businesses in New Hampshire, Maine, Pennsylvania, Maryland and Virginia, and serves about 120,000 Internet, 76,000 video and 37,000 telephony customers.

MetroCast's calendar 2017 revenue is expected to be $230 million, while its adjusted EBITDA is projected to be $121 million.

Louis Audet, president and CEO of Cogeco Communications, said, "The MetroCast systems are a strong strategic fit for Atlantic Broadband. With this acquisition, we are increasing our customer base in attractive markets adjacent to the ones we currently serve."

Cogeco Communications will finance this acquisition through Atlantic Broadband with a combination of committed secured debt provided by two banks and an equity investment by institutional investor Caisse de dépôt et placement du Québec.

Atlantic Broadband CEO Richad Shea noted that following his company's acquisition and integration of the MetroCast Connecticut system almost two years ago, his company understands first-hand the sizable residential and business growth potential that it can expect with the remaining MetroCast systems.

Atlantic Broadband noted that the acquisition will add scale in the American Broadband services segment, which continues to exhibit steady growth and is expected to keep generating strong operating margins.

Atlantic Broadband's Primary Service Units or PSU will increase from approximately 602,000 to 835,000 pro forma the acquisition.

MetroCast's systems are largely located in non-metropolitan markets with attractive demographic profiles and market dynamics, according to Cogeco.

In conjunction with the transaction, Atlantic Broadband expects to realize tax benefits with a present value of about $310 million.

CCA.TO closed Friday's trading at C$79.80, up C$0.10 or 0.13 percent on a volume of 23,626 shares.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

comments powered by Disqus
Follow RTT