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Cogeco to expand in eastern U.S. with $1.4 billion MetroCast purchase

Cogeco to expand in eastern U.S. with $1.4 billion MetroCast purchase
Business
MONTREAL—Cogeco Communications Inc. is preparing to expand in the eastern United States by purchasing the MetroCast cable systems business in a deal valued at $1.4 billion (U.S.).

The Montreal-based company will make the acquisition through its Atlantic Broadband subsidiary, which has a definitive purchase agreement with Harron Communications LP, a family business.

Cogeco says the Caisse de depot pension system will provide $315 million towards the deal, in return for a 21 per cent equity stake in Atlantic Broadband’s holding company.

Two banks will also provide secured debt financing to Atlantic Broadband.

Cogeco says MetroCast is a good strategic fit for Atlantic Broadband, as both have TV, internet and phone customers in several U.S. eastern states.

In addition, Cogeco expects Atlantic Broadband will benefit from about $310 million of tax benefits from the deal.
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