Cogeco Communications to complete $1.4bn MetroCast acquisition
14 July 2017 | Natalie Bannerman
Atlantic Broadband, a subsidiary of Cogeco Communications, has announced that it will acquire all of the cable systems belonging to Harron Communications subsidiary MetroCast.
The definitive agreement between the two parties will be financed through a combination of secure debt provided by two banks and an equity investment by Caisse de dépôt et placement du Québec, the institutional investor.
"As a long-term investor, CDPQ seeks opportunities to invest in businesses that are resilient to economic cycles, are led by experienced teams and have the ability to sustain growth over time. Cogeco is a good example of this, and we look forward to investing by its side as it pursues its North American expansion," says Christian Dubé, executive vice president, at Caisse de dépôt et placement du Québec.
The purchase of these new assets serve to: further Atlantic Broadband’s growth strategy by increasing its geographical footprint in Maine and Florida, scales up the American broadband services market increasing the company’s primary service units from 602,000 to 835,000, sees entry into non-metropolitan areas where MetroCast systems reside, the opportunity to leverage Atlantic Broadband’s product and sales expertise, the adoption of management’s successful experience integrating systems and having a high quality fully digital network comprising of 860MHz of fibre to the home in 95% of the network, which offers 150Mbps internet service across the network.
Richard Shea, Atlantic Broadband President and CEO, said: "After our highly successful acquisition and integration of the MetroCast Connecticut system almost two years ago, we understand first-hand the sizable residential and business growth potential that we can expect with the remaining MetroCast systems. We have a proven integration plan and a track record of successfully migrating our platforms and service offerings. These well-maintained systems deliver attractive demographics which make them ideal for our suite of residential video, Internet and telephony services as well as our business services. We look forward to welcoming MetroCast customers and employees to Atlantic Broadband."
MetroCast networks serve close to 236,000 homes and business in the New Hampshire, Maine, Pennsylvania, Maryland and Virginia area. 120,000 of which are internet and 3,000 are telephony customers. The company’s forecasted gross revenue is roughly $230 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation). The total purchase price of MetroCast assets are in the region of $1.4 billion.
"The acquisition of the MetroCast cable systems allows Atlantic Broadband to increase its presence in the growing and lucrative U.S. cable market," said Louis Audet, president and CEO of Cogeco Communications, the parent company of Atlantic Broadband.