Cogeco to expand in eastern U.S. with $1.4 billion MetroCast purchase
|Toronto Star 10 Jul 2017 at 07:22|
MONTREALâ€”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 Broadbandâ€™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.