Cogeco Cable Inc. Acquires Atlantic BroadbandWednesday, July 18th, 2012
Cogeco expands its operations to the United States
MONTRÉAL, QUÉBEC — Cogeco Cable Inc. (“Cogeco Cable”) (TSX:CCA) announced today that it has entered into a definitive agreement to acquire all of the shares of Atlantic Broadband (“Atlantic”) an independent cable system operator serving about 252,000 basic video customers providing Analog and Digital Video, as well as High Speed Internet (HSI) and Telephony services. The transaction is valued at US$1.36 billion or 8.3x 2013E EBITDA, subject to certain closing adjustments. Atlantic is privately owned by ABRY Partners IV, L.P. (“ABRY”) and Oak Hill Capital Partners, LP. Atlantic Broadband Group, LLC was formed in 2003 and is the 14th largest cable television system operator in the United States. It operates certain cable systems in Pennsylvania, Florida, Maryland, Delaware and South Carolina.
“This acquisition marks an attractive entry point into the US market for Cogeco Cable. There are sizable opportunities for growth including: increasing the penetration of the small and mid-sized business segment, and maximizing the bundling potential of services in the residential sector. We are very pleased to welcome all the employees of Atlantic Broadband into our organization,” said Louis Audet, President and CEO of Cogeco Cable.
Pro forma for the transaction, Cogeco Cable, will serve more than 1.1 million basic video customers across Canada and the United States.
Cogeco Cable intends to finance the transaction through a combination of cash on hand, a draw-down on its existing revolving term facility of approximately US$550 million and US$660 million of borrowings under committed non-recourse debt financing at Atlantic Broadband. The pro-forma consolidated debt to EBITDA level of Cogeco Cable will be 3.1x at closing.
The transaction is subject to usual closing conditions, including Hart-Scott-Rodino approval (anti-trust), federal (FCC), state and local regulatory approvals and other customary conditions. We expect the transaction to close before the end of the calendar year.
Gleacher and Company Securities Inc. is acting as exclusive financial advisor. Bank of America Merrill Lynch is serving as sole lead arranger and providing the committed debt financing at Atlantic Broadband. Stikeman Elliott S.E.N.C.R.L., s.r.l, Simpson Thacher & Bartlett LLP and Wiley Rein LLP are acting as legal advisors in connection with this transaction.
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