Cogeco Communications said that its Atlantic Broadband unit has agreed to buy all of MetroCast’s brand name cable systems from Harron Communications for USD 1.4 billion. Cogeco said the deal will help the company expand in North America and further into the US cable market. Under the agreement, the Caisse de depot et placement du Quebec will invest USD 315 million for a 21 percent stake in Atlantic Broadband’s holding company. The rest of the purchase price will be financed by secured debt financing from two banks.
MetroCast’s networks pass close to 236,000 homes and businesses in New Hampshire, Maine, Pennsylvania, Maryland and Virginia and serve 120,000 Internet, 76,000 video and 37,000 telephony customers. Revenues for this year is expected to reach USD 230 million and adjusted EBITDA USD 121 million.
Cogeco said the acquisition will add scale in the American Broadband services segment and is expected to keep generating strong operating margins. Atlantic Broadband’s Primary Service Units (PSU) will increase from about 602,000 to 835,000 pro forma the acquisition. The high quality, fully digital network, is made up of 860 MHz or FTTH in 95 percent of the network, and provides 150 Mbps across its footprint.
In conjunction with the transaction, Atlantic Broadband expects to realize tax benefits with a present value of USD 310 million.
The buy is subject to regulatory approvals along with other customary closing conditions and is expected to close in January 2018.
