Canadian cable operator Cogeco has agreed to acquire US cableco Atlantic Broadband for US$1.36bn, or 8.3x 2013E EBITDA.
The transaction marks Cogeco’s debut in the US market. It will be financed through a combination of cash-on-hand, a draw-down on…
Canadian cable operator Cogeco has agreed to acquire US cableco Atlantic Broadband for US$1.36bn, or 8.3x 2013E EBITDA.
The transaction marks Cogeco’s debut in the US market. It will be financed through a combination of cash-on-hand, a draw-down on its existing revolver of US$550m and US$660m of borrowings under committed non-recourse debt financing at Atlantic, Cogeco said.
At closing, the consolidated debt to EBITDA level of Cogeco will be 3.1x. The deal, which is subject to regulatory approval, is expected to close by the end of the year.
Gleacher & Co is acting as exclusive financial adviser, while Bank of America Merrill Lynch is serving as sole lead arranger and provider of the committed debt financing to Atlantic. Stikeman Elliott, Simpson Thacher & Bartlett and Wiley Rein provided legal advice.
Owned by private equity firms ABRY Partners and Oak Hill Capital Partners, Atlantic claims to be among the top 15 cable television system operator in the US.
It provides analogue and digital video, high-speed internet and telephony services to 250,000 customers.
Commenting on the transaction, Cogeco CEO Louis Audet said: “This acquisition marks an attractive entry point into the US market for Cogeco Cable. There are sizeable opportunities for growth including: increasing penetration of the small and mid-sized business segment, and maximizing the bundling potential of services in the residential sector.”
