Cogeco entering U.S. market with cable acquisition

Cogeco Cable Inc. has reached a deal to acquire American cable operator Atlantic Broadband Inc. for $1.36 billion US, the company said. Cogeco said in a release Wednesday that Atlantic Broadband ranks as the 14th largest cable operator in the United States with 252,000 basic video customers who receive analog or digital TV. The company also has high-speed Internet and telephone subscribers. Atlantic Broadband, formed in 2003, operates in Pennsylvania, Florida, Maryland, Delaware and South Carolina, Cogeco said. The addition of Atlantic Broadband’s U.S. subscriber base will bring Cogeco’s total basic video customer number to about 1.1 million across the U.S. and Canada. The deal, to be financed through a combination of cash and debt, must receive regulator clearance from federal and local regulators in the United States, the company said. “This acquisition marks an attractive entry point into the US market for Cogeco Cable,” Louis Audet, Cogeco’s president and CEO, said in the release. “There are sizeable 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.” This year, the company abandoned its entry into the European market when it sold its Portuguese subsidiary Cabovisao. Cogeco acquired the Portuguese cable provider in 2006 but it struggled to retain subscribers after the 2008 global economic crisis. The company sold Cabovisao to the Altice Group for about $59.3 million in February. Cogeco CEO Louis Audet said on a conference call Wednesday that there is room for growth in the U.S. through an increase in penetration or “tuck-in acquisitions, a number of which are available in the United States, in contrast to Canada, where the consolidation is essentially over.”

Cogeco entering U.S. market with cable acquisition

Brief | July 18, 2012

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