Canadian cable operator Cogeco Communications said its U.S. subsidiary Atlantic Broadband has completed the $1.4 billion purchase of MetroCast Cable systems in five states.
The deal was first announced in July. MetroCast was owned by Harron Communications and had about 120,000 high-speed internet, 76,000 video and 37,000 telephone subscribers at the time the transaction was announced. MetroCast systems pass about 236,000 homes in New Hampshire, Maine, Pennsylvania, Maryland and Virginia
Cogeco said Atlantic Broadband raised about $1.85 billion in debt for the purchase, and obtained another $315 million through an investment from Caisse de dépôt et placement du Québec (“CDPQ”) for a 21% interest in Atlantic Broadband’s holding company. These proceeds were used to finance the $1.4 billion purchase price and to refinance Atlantic Broadband’s existing debt, the parent company said.
MetroCast will retain its existing brand name and will continue to offer its current TV, Internet and Phone services to business and residential customers. Starting in spring of this year, MetroCast will begin offering a suite of enhanced services under the Atlantic Broadband brand name.
Cogeco had purchased MetroCast systems in Connecticut in 2015 for about $200 million. Two years later, the Canadian company decided to go all-in, buying the rest of the company in a larger deal.
“After our highly successful acquisition and integration of the MetroCast Connecticut system more than two years ago, we understand the significant residential and business growth potential in this business,” said Atlantic Broadband CEO Richard Shea in a statement “A core strength of MetroCast has been its excellent operational and service team. We are pleased to welcome all MetroCast operating employees, including the local General Managers, to the Atlantic Broadband family. We look forward to working together to launch new and improved TV, Internet and Phone services to residential and business customers in these markets.”
Atlantic Broadband is the ninth largest cable operator in the U.S. and the deal was expected to increase its PSUs (personal service units, a mix of video, voice and broadband customers) from 602,000 to 835,000, according to earlier company statements.
“This acquisition establishes Atlantic Broadband as a strategic platform in the U.S. with a diverse footprint extending up the East Coast from Florida to Maine,” said Cogeco CEO Louis Audet in a statement. “It has been a great opportunity to partner with CDPQ for this transaction and we look forward to working with them to continue to grow this business in the U.S.”