Canadian cable operator Cogeco is making its first foray south of the border with its $1.36 billion purchase of Atlantic Broadband.
Cogeco, the fourth-largest cable operator in Canada, will pick up Atlantic Broadband’s triple-play customers, which include 252,000 basic video subscribers, in Pennsylvania, Florida, Maryland, Delaware and South Carolina. The deal needs to pass the customary closing conditions but is expected to close by the end of the year.
Atlantic Broadband is the 14th-largest cable operator in the nation. Once the purchase is finalized, Montreal-based Cogeco, which primarily operates in Quebec and Ontario, will serve more than 1.1 million basic video customers across Canada and the United States.
“This acquisition marks an attractive entry point into the U.S. market for Cogeco Cable. There are sizable opportunities for growth, including: increasing the penetration of the small and mid-size 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 Cogeco Cable President and CEO Louis Audet.
Abry Partners and Oak Hill Capital Partners privately own Atlantic Broadband, which was formed in 2003.
Cogeco said it intends to finance the transaction through a combination of cash on hand, a draw-down on its existing revolving term facility of approximately $550 million and $660 million of borrowings under committed non-recourse debt financing at Atlantic Broadband.
Earlier this year, Cogeco sold Portuguese subsidiary Cabovisao for $60 million, which was significantly less than the $660 million it paid for the company in 2006.