Alliance to drive continued broadband
investment in rural America
Mega Broadband Investments Holdings LLC ("MBI" or the “Company”)
and Cable One, Inc. (NYSE: CABO) (“Cable One”) announced today that
they have entered into a definitive agreement providing for a
strategic investment by Cable One in MBI. Cable One will purchase a
45% minority stake in MBI from affiliates of GTCR LLC (“GTCR”), a
leading private equity firm, for approximately $574.1 million in
cash, subject to adjustment for certain new debt incurrences and
transaction expenses. In addition to the minority stake it will
acquire, Cable One will have the right to purchase the remaining
interests in MBI at a predetermined multiple of earnings beginning
in 2023.
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MBI was formed through a series of acquisitions, including Vyve
Broadband, Northland Communications and the broadband assets of
Eagle Communications. Unified today under the Vyve Broadband brand,
the Company provides high-speed data, television and voice services
to residential and business customers in rural markets across
Alabama, Arkansas, California, Colorado, Georgia, Idaho, Kansas,
Louisiana, Nebraska, North Carolina, Oklahoma, South Carolina,
Tennessee, Texas, Washington, and Wyoming. Vyve Broadband’s network
passes approximately 630,000 homes.
“This strategic investment in MBI reflects a continuation of our
commitment to provide rural America with reliable high-speed
internet service,” said Julie Laulis, President and CEO of Cable
One. “MBI has developed an excellent network in geographies
complementary to our existing footprint and we are excited to share
in its future growth. MBI’s operating model and local-first focus
mirrors our own and we are pleased to partner with MBI.”
MBI has upgraded systems and a high-capacity plant with more
than 15,800 network plant miles, including over 4,100 fiber route
miles, capable of delivering Gigabit speeds across its
footprint.
“This transaction represents the next step of MBI’s ongoing
transformation, and I am excited to have the backing of Cable One
alongside GTCR,” said Phil Spencer, CEO of MBI. “Over the last few
years our team has invested significant capital to upgrade our
networks, roll out Gigabit internet service, and enhance business
services across our footprint. Under our new partnership, we plan
to continue making significant investments in our network, our
communities, and our employees.”
“We are excited by Cable One’s investment in MBI. We view Cable
One as a leader in the industry with its broadband-first approach,
which we have sought to emulate at MBI,” said Stephen Jeschke,
Managing Director at GTCR. “We look forward to our partnership and
our collective continued investment to advance the broadband
networks in the rural communities MBI serves.”
Transaction Details
The transaction is expected to be completed during the fourth
quarter of 2020. Cable One expects to fund the transaction through
cash on hand.
Kirkland & Ellis LLP acted as legal advisor and Credit
Suisse acted as financial advisor to MBI on this transaction.
Locke Lord LLP acted as legal advisor and Truist Securities,
Inc. acted as financial advisor to Cable One on this
transaction.
Additional Information
Cable One anticipates providing additional information regarding
the transaction during its Third Quarter 2020 earnings call in
November 2020.
About Mega Broadband Investments
Mega Broadband Investments LLC, operating as Vyve Broadband,
largely serves rural communities in sixteen states, across the
Southeast, Northwest, and Mid-South United States. Vyve Broadband
offers an extensive range of broadband, fiber connectivity, cable
television and voice services for commercial and residential
customers. Residential services include high-speed Internet with
services up to Vyve Gig, all-digital and high-definition video and
digital voice services. Vyve Business Services provides optical
Ethernet, PRI and hosted voice services to the business community.
For more information, please visit www.vyvebroadband.com.
About GTCR
Founded in 1980, GTCR is a leading private equity firm focused
on investing in growth companies in the Financial Services &
Technology, Healthcare, Technology, Media & Telecommunications
and Growth Business Services industries. The Chicago-based firm
pioneered The Leaders Strategy™ - finding and partnering with
management leaders in core domains to identify, acquire and build
market-leading companies through transformational acquisitions and
organic growth. Since its inception, GTCR has invested more than
$18 billion in over 200 companies. For more information, please
visit www.gtcr.com.
About Cable One
Cable One, Inc. (NYSE: CABO) is a leading broadband
communications provider serving more than 900,000 residential and
business customers in 21 states through its Sparklight® and
Clearwave™ brands. Sparklight provides consumers with a wide array
of connectivity and entertainment services, including high-speed
internet and advanced Wi-Fi solutions, cable television and phone
service. Sparklight Business and Clearwave provide scalable and
cost-effective products for businesses ranging in size from small
to mid-market, in addition to enterprise, wholesale and carrier
customers.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This communication may contain “forward-looking statements” that
involve risks and uncertainties. These statements can be identified
by the fact that they do not relate strictly to historical or
current facts, but rather are based on current expectations,
estimates, assumptions and projections about Cable One’s and MBI’s
industry, businesses, strategies, dividend policies, financial
results and financial conditions as well as anticipated impacts
from the COVID-19 pandemic on Cable One and MBI and future
responses. Forward-looking statements often include words such as
“will,” “should,” “anticipates,” “estimates,” “expects,”
“projects,” “intends,” “plans,” “believes” and words and terms of
similar substance in connection with discussions of future
operating or financial performance. As with any projection or
forecast, forward-looking statements are inherently susceptible to
uncertainty and changes in circumstances. Cable One’s and MBI’s
actual results may vary materially from those expressed or implied
in their forward-looking statements. Accordingly, undue reliance
should not be placed on any forward-looking statement made by Cable
One or MBI or on either’s behalf. Important factors that could
cause Cable One’s actual results to differ materially from those in
any forward-looking statements include government regulation,
economic, strategic, political and social conditions and the
following factors, certain of which are discussed in Cable One’s
latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q
for the period ended June 30, 2020 (the “Second Quarter 2020 Form
10-Q”) as filed with the Securities and Exchange Commission (the
“SEC”):
- uncertainties as to the timing of the initial transaction and
Cable One’s right to purchase the remaining interests in MBI
(collectively, the “Transactions”) and the risk that the
Transactions may not be completed in a timely manner or at
all;
- the possibility that any or all of the conditions to the
consummation of the Transactions may not be satisfied or waived,
including failure to receive any required regulatory approvals (or
any conditions, limitations or restrictions placed in connection
with such approvals);
- the effect of the announcement or pendency of the Transactions
on Cable One’s or MBI’s ability to retain and hire key personnel
and to maintain relationships with customers, suppliers and other
business partners;
- risks relating to diverting management’s attention from Cable
One’s or MBI’s ongoing business operations;
- risks relating to Cable One’s initial minority ownership
position in MBI;
- uncertainties relating to Cable One’s ability to finance the
purchase of the remaining interests in MBI on terms acceptable to
Cable One or at all;
- following the completion of the Transactions (if applicable),
Cable One’s ability to integrate MBI’s operations into its own as
well as uncertainties as to Cable One’s ability and the amount of
time necessary to realize the expected synergies and other benefits
of the transaction;
- the duration and severity of the COVID-19 pandemic and its
effects on Cable One’s and MBI’s businesses, financial conditions,
results of operations and cash flows;
- rising levels of competition from historical and new entrants
into Cable One’s markets;
- recent and future changes in technology;
- Cable One’s ability to continue to grow its business services
products;
- increases in programming costs and retransmission fees;
- Cable One’s ability to obtain hardware, software and
operational support from vendors;
- the effects of any new significant acquisitions and strategic
investments by Cable One;
- risks that Cable One’s rebranding may not produce the benefits
expected;
- damage to Cable One’s reputation or brand image;
- risks that the implementation of Cable One’s new enterprise
resource planning system disrupts business operations;
- adverse economic conditions;
- the integrity and security of Cable One’s network and
information systems;
- the impact of possible security breaches and other disruptions,
including cyber-attacks;
- Cable One’s failure to obtain necessary intellectual and
proprietary rights to operate its business and the risk of
intellectual property claims and litigation against it;
- Cable One’s ability to retain key employees;
- legislative or regulatory efforts to impose network neutrality
and other new requirements on Cable One’s data services;
- additional regulation of Cable One’s video and voice
services;
- Cable One’s ability to renew cable system franchises;
- increases in pole attachment costs;
- changes in local governmental franchising authority and
broadcast carriage regulations;
- the potential adverse effect of Cable One’s level of
indebtedness on its business, financial condition or results of
operations and cash flows;
- the restrictions the terms of Cable One’s indebtedness place on
its business and corporate actions;
- the possibility that interest rates will rise, causing Cable
One’s obligations to service its variable rate indebtedness to
increase significantly;
- Cable One’s ability to incur future indebtedness;
- fluctuations in Cable One’s stock price;
- Cable One’s ability to continue to pay dividends;
- dilution from equity awards and potential stock issuances;
- provisions in Cable One’s charter, by-laws and Delaware law
that could discourage takeovers and limit the judicial forum for
certain disputes and the liabilities for directors; and
- the other risks and uncertainties detailed from time to time in
Cable One’s filings with the SEC, including but not limited to its
latest Annual Report on Form 10-K and the Second Quarter 2020 Form
10-Q as filed with the SEC.
Any forward-looking statements made by Cable One or MBI in this
communication speak only as of the date on which they are made.
Each of Cable One and MBI is under no obligation, and expressly
disclaims any obligation, except as required by law, to update or
alter its forward-looking statements, whether as a result of new
information, subsequent events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200928005755/en/
Mega Broadband Investments/GTCR Kellie Kennedy
312-933-4903 kelliek@theharbingergroup.com
Cable One Trish Niemann Senior Director, Corporate
Communications 602-364-6372
Steven Cochran Senior Vice President and Chief Financial Officer
602-364-6210
Cable One (NYSE:CABO)
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